COMPANY DESCRIPTION
Founded
in –2010 | Current Market Cap – 13.22 Billion USD
BeiGene,
Ltd. develops and commercializes molecularly-targeted and immuno-oncology drugs
for the treatment of cancer. Its commercial products include ABRAXANE, a
chemotherapy product for the treatment of breast, non-small cell lung,
pancreatic, and gastric cancer; REVLIMID, an oral immunomodulatory drug for the
treatment of multiple myeloma in combination with dexamethasone; and VIDAZA, a
pyrimidine nucleoside analog for the treatment of intermediate-2 and
myelodysplastic syndromes, chronic myelomonocyte leukemia, and acute myeloid
leukemia with 20% to 30% blasts and multi-lineage dysplasia. The company’s
clinical stage drug candidates include BGB-3111, a small molecule Bruton’s
tyrosine kinase (BTK) inhibitor for the treatment of lymphomas; BGB-A317, a
humanized monoclonal antibody for solid and hematological cancers; BGB-290, a
small molecule inhibitor of PARP1 and PARP2 for the treatment of homologous
recombination deficient cancers. BeiGene, Ltd. is based in George Town, the
Cayman Islands.
RECOMMENDATION
We rate BeiGene Ltd. a buy at USD 105
for a target of USD 162 in four months.
Below are the basic reasons to
recommend this stock as a Buy.
· The company initiated a global phase three trial
comparing BGB-311 to ibrutinib in patients with Wald Enstrom’s
Macroglobulinemia, as well as a pivotal program in China to treat patients with
relapsed/refractory mantle cell lymphoma and relapsed/refractory chronic
lymphocytic leukemia/small lymphocytic lymphoma.
· The company initiates phase 1 anti-PD-1 antibody
BGB-A317 in combination with their PARP inhibitor BGB-290 in patients with
solid tumors. Preliminary data was encouraging, with patients demonstrating signs
of anti-tumor activity and the drug combo was generally well-tolerated. BeiGene
is looking forward to seeing activity in expansion cohorts (triple negative
breast cancer, ovarian cancer, castration-resistant prostate cancer, pancreatic
cancer, and others).
· In mid-June updated phase 1 data on
their BTK inhibitor BGB-3111 in patients with chronic lymphocytic leukemia
(CLL) and small lymphocytic lymphoma (SLL) was presented in Switzerland. The
drug appeared to be well tolerated, with overall response rate of 94% quite
promising and a very low discontinuation rate of 3%, which is a very good
progress. Keep in mind that management believes BGB-3111 potentially has best-in-class
attributes, while initial efficacy of the asset in combination with
obinutuzumab supports accelerated development in a broader FL population.
· The company is
building its own commercial biologics manufacturing facility in Guangzhou,
Guangdong Province, China as part of a joint venture with Guangzhou Development
District to support research and development efforts in China.
· The company has two
other clinical-stage assets, BGB-290 and BGB-283. BGB-290 is an orally
available inhibitor of PARP1 and PARP2 enzymes, which are involved in tumor
growth. Olaparib (Lynparza) is currently the only FDA-approved PARP inhibitor.
The company claims BGB-290 may be more selective and has significant brain
penetration compared to olaparib, which is another factor that may drive the
company ahead.
· The company
collaborates with Merck KGaA worldwide (outside of China) to develop and
commercialize the asset. The deal is worth about $100mn in milestone payments,
plus royalties.
EARNINGS
BeiGene Q3 GAAP EPADS of -$2.53
beats by $0.49. Revenue of $54.2M (-75.4% Y/Y) beats by $7.14M.
Revenue for the three months ended
September 30, 2018 was $54.20 million, compared to $220.21 million in the same
period in 2017. The decrease is primarily attributable to the upfront payment
recognized in the prior year period under our collaboration agreement with
Celgene for tislelizumab.
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