BeiGene, Ltd.

Annual Report on Form 10‑K

TABLE OF CONTENTS

PART I

Unless the context requires otherwise, references in this report to “BeiGene,” the “Company,���Company,” “we,” “us,” and “our” refer to BeiGene, Ltd. and its subsidiaries, on a consolidated basis.

Item 1.Business

Overview

We are a globally focusedcommercial-stage biopharmaceutical company dedicated to becoming a leader in the discoveryfocused on developing and development ofcommercializing innovative molecularly targeted and immuno-oncology drugs for the treatment of cancer. We believe the next generation of cancer treatment will utilize therapeutics both as monotherapy and in combination to attack multiple underlying mechanisms of cancer cell growth and survival. We further believe that discovery of next-generation cancer therapies requires new research tools. To that end,have three internally-developed late-stage clinical drug candidates:

In addition, we have developed a proprietary cancer biology platform that addresses the importance of tumor-immune system interactions and the value of primary biopsies in developing new models to support our drug discovery effort. Our strategy is to advance a pipeline oftwo internally-developed drug candidates with the potential to be best-in-class monotherapies and also important components of multiple-agent combination regimens. Over the last five years, using our cancer biology platform, we have developed clinical-stage drug candidates that inhibit the important oncology targets Bruton’s tyrosine kinase, or BTK, RAF dimer protein complex and PARP family of proteins, andin Phase 1 clinical development: lifirafenib (BGB-283), an immuno-oncology agent that inhibits the immune checkpoint protein receptor PD-1. Our drug candidates targeting BTK, RAF dimer and PARP have demonstrated early activity and favorable safety profiles in the dose-escalation phases of clinical trials conducted in Australia and New Zealand, and our BTK and RAF dimer drug candidates are currently in the dose-expansion phases of their respective clinical trials. Our PD-1 drug candidate is currently in the dose-escalation phase of our clinical trial in Australia and New Zealand. As of March 25, 2016, our four clinical-stage drug candidates have been dosed in over 400 patients. We have Investigational New Drug Applications, or INDs, in effect for our BTK and PD-1 inhibitors with the U.S. Food and Drug Administration, or FDA, and have received approval of our Clinical Trial Application for ourinvestigational RAF dimer inhibitor, from the China Food and Drug Administration, or CFDA. Our research operations are in China, which we believe confers several advantages including access to a deep scientific talent pool and proximity to extensive preclinical study and clinical trial resources through collaborations with leading cancer hospitals in China. Beyond the substantial market opportunities we expect to have in the United States, Europe and Japan, we believe our location in China provides us the opportunity to bring best-in-class monotherapies and combination therapeutics to our home market where many global standard-of-care therapies are currently not approved or available. We have assembled a team of more than 240 individuals in China, the United States, and Australia with deep scientific talent and extensive global pharmaceutical experience who are deeply committed to advancing our mission to become a leader in next-generation cancer therapies.

We believe that oncology treatment has enteredBGB-A333, an era of revolutionary change in which cancer drugs will be used both as monotherapy and in combination to attack multiple underlying mechanisms of cancer cell growth and survival. Due to breakthroughs in gene sequencing and methods of tumor characterization, cancer is rapidly being redefined from a paradigm of classification based on tissue of origin, such as lung, colorectal or ovarian, to one of specific molecular characteristics, such as abnormalities in HER2, BRCA, BRAF, ALK and EGFR genes and proteins. As a result, many more specific disease subpopulations can be targeted for more effective treatment than has been possible in the past. This ability to better classify cancers has allowed the development of molecularly targeted drugs that address specific cancer subpopulations and provide high response rates in tumors with particular mutations. In addition, the development of immuno-oncology agents such as antibodies targeting the CTLA-4 and PD-1 protein receptors and the PD-L1 protein has demonstrated the importance of the human immune system in cancer therapy and the potential for high rates of more durable responses from agents that activate the immune system to identify and eliminate tumors. We believe that the future of cancer therapy will involve combinations of molecularly targeted and immuno-oncology drugs tailored to particular tumor sub-groups and have directed our research efforts at both types of drugs.

Our belief that this fundamental shift was about to occur in cancer research led us early in our history to develop a cancer biology platform that addresses the importance of tumor-immune system interactions and the value of primary tumor biopsies in developing new models. Our proximity to leading cancer treatment centers in Beijing and our close relationships with clinicians who treat patients and perform biopsies and surgeries at those centers have

allowed us to develop an extensive collection of in vivo, ex vivo and in vitro cancer models. Given our belief that the human immune system can play an important role in combating cancer and that future treatments will involve combination therapies, we have introduced elements of a functional immune system into these models. Our proprietary models allow our research team to better select targets and to screen and evaluate therapeutic agents we believe have significant potential alone or in combination for treating a variety of cancers. Our models are a key component in the screening cascade we follow in our drug discovery effort and permit us to evaluate potential drug candidates in conditions that much better approximate a patient’s cancer at the time of treatment. This is particularly significant when drug discovery requires evaluation not only of monotherapies but also multiple combinations and regimens targeting specific mutations while simultaneously immobilizing the defenses cancer cells mount against the human immune system. We expect to continue investing in and enhancing our cancer biology platform to further advance our capabilities for the discovery of drug candidates with best-in-class characteristics and the potential for use in immuno-oncology combination therapies.

We have used our cancer biology platform to develop four clinical-stage drug candidates that we believe have the potential to be best-in-class or first-in-class. In addition, we believe that each has the potential to be an important component of a drug combination addressing major unmet medical needs. Our clinical-stage drug candidates include three molecularly targeted agents, BGB-3111, BGB-290 and BGB-283 and one immuno-oncology agent, BGB-A317. BGB-3111 is a potent and selective small molecule inhibitor of BTK. BGB-290 is a highly selective small molecule inhibitor of PARP1 and PARP2. BGB-283 is a small molecule designed to inhibit both the monomer and dimer forms of the RAF kinase.  For each of our molecularly targeted drug candidates, we have achieved proof-of-concept by demonstrating objective responses in the defined patient populations. Our clinical-stage immuno-oncology agent, BGB-A317, is a humanized monoclonal antibody designed to act against the immune checkpoint receptor, programmed cell death-1, or PD-1. In addition to our clinical-stage drug candidates, we have a robust pipeline of preclinical programs and are planning to advance one or more of these programs into the clinic in the next 18 months. We have granted exclusive licenses of the rights to develop and commercialize BGB-283 worldwide (outside of China) to Merck KGaA. We have all commercial rights for all of our other clinical and preclinical drug candidates and programs.

Our research operations are in China, which we believe confers clinical, commercial and regulatory advantages. Our location provides us with access to a deep scientific talent pool and proximity to extensive clinical trial resources through collaborations with leading cancer hospitals in China. In addition, China accounts for approximately 20–25% of the world’s cancer population and is experiencing rapid growth in the market for cancer therapeutics. Currently, many global standard-of-care therapies are not approved or available in China, resulting in a significant need for innovative therapeutics with strong efficacy and safety profiles for patients who are naive to such treatments. While we plan to seek worldwide regulatory approval for our drug candidates, we also plan to seek expedited approval from the CFDA for our drug candidates as locally developed (Category 1) drugs. Expedited approval of our drug candidates in China will address the current unmet need in China and further our understanding and characterization of these drugs for approval in other markets.

We have a global team of approximately 240 employees and consultants, including a global research and development team of over 160 scientists, clinicians, and staff. Our team shares the vision of improving the lives of cancer patients globally and has built a scientifically-driven and collaborative culture fostering both nimble and rational decision-making. Our management team and scientific advisory board have deep experience and capabilities in biology, chemistry, drug discovery, clinical development, manufacturing and commercialization. Our scientific advisory board is chaired by our co-founder Xiaodong Wang, Ph.D., a highly respected cancer scientist, member of the U.S. National Academy of Sciences and the Chinese Academy of Sciences and head of China’s National Institute of Biological Sciences. Our scientific advisory board also includes Ronald Levy, M.D., Ph.D.; Neal Rosen, M.D., Ph.D.; Charles Sawyers, M.D.; David Schenkein, M.D.; Jedd Wolchok, M.D., Ph.D.; and Steve Young, Ph.D.

Since our inception in 2010, we have raised $170 million in private equity financing from our dedicated group of investors, including leading healthcare-focused funds, major mutual funds, China-based funds and our founders. On February 8, 2016, we completed our initial public offering and received net proceeds of approximately $166.6 million, after deducting underwriting discounts and offering expenses.

Next Generation of Cancer Treatment

We believe that oncology treatment is rapidly evolving, offering patients the promise of high rates of more durable responses that improve survival from weeks to years while avoiding the severe toxicities typically associated with chemotherapy. While these outcomes may occasionally be achieved with monotherapy, we believe that the emergence of resistance is a major problem and that better outcomes will be achievable by combining multiple drugs as it is done in treating infectious diseases.

The next generation of cancer therapies will be based, we believe, on advances in four areas:

·Reclassification of disease based on underlying molecular defect.  Due to breakthroughs in gene sequencing and methods of tumor characterization, cancer is increasingly being redefined from a paradigm of tumor classification based on originating tissue type, such as lung, colorectal or ovarian, to one of characterization based on the genetic aberrations and signature gene expression patterns, such as in HER2, BRCA, BRAF, ALK and EGFR. As a result, many more disease subpopulations can be specifically targeted, resulting in more effective treatment than was possible in the past. Disease classifications are substantially more sophisticated than 10 years ago, and we believe they will become increasingly so in the future.

·Effective molecularly targeted therapy, but often limited durability.  The ability to better understand the mechanisms underlying cancer has allowed the development of effective drugs that target important molecular drivers and generate high response rates in tumors with these drivers. Examples of approved drugs include gefitinib and erlotinib for patients with EGFR mutations, crizotinib and ceritinib for patients with ALK translocations, and vemurafenib and dabrafenib for patients with BRAF mutations. Unfortunately, in many of these cases, responses have been relatively short-lived as cancers can develop alternative mechanisms to compensate and ultimately bypass these drugs’ blockade of molecular signaling. For example, while 52% of previously treated metastatic melanoma patients with BRAF V600E achieved an objective response once treated with vemurafenib, the median duration of response was only 6.5 months.

·Immune checkpoint inhibitors have shown remarkable clinical benefit, demonstrating the power of the immuno-oncology approach. Improved understanding of cancer immunology has led to the identification of critical immune checkpoints—i.e., mechanisms by which cancer cells evade the surveillance of the immune system. Inhibitors of the immune checkpoints CTLA-4 and PD-1 have shown success in the clinic. Two PD-1 monoclonal antibodies, nivolumab and pembrolizumab, have been approved by the FDA, for treating certain patients with metastatic melanoma and in the case of nivolumab, squamous non-small cell lung cancer. The results from clinical trials with several immune checkpoint inhibitors as monotherapy have shown at least a signal of efficacy in a wide spectrum of cancers including melanoma, lung cancer, kidney cancer, head and neck cancer, liver cancer, bladder cancer, gastric cancer, esophagus cancer, ovarian cancer, Hodgkin’s lymphoma, diffuse large B-cell lymphoma, follicular lymphoma, triple-negative breast cancer, and a subtype of colorectal cancer. In addition, these agents can be effective against large tumors. In some tumors, including squamous and non-squamous non-small cell lung cancer, renal cell carcinoma and melanoma, randomized Phase 3 trials have reportedly demonstrated superior overall survival using PD-1 antibodies compared to chemotherapy. Although certain distinct toxicities associated with PD-1 and PD-L1 antibodies have been observed, these agents have been generally well-tolerated.

·The need for and early promise of combination therapy.  While clinical data with molecularly targeted drugs as monotherapy have been encouraging, achieving a high rate of durable responses remains difficult in most cancer types. Clinical results of immuno-oncology agents such as checkpoint inhibitors including PD-1, PD-L1 and CTLA-4 antibodies have been reported. However, objective responses have been achieved in only a minority of unselected, solid tumor patients even in highly immunogenic tumors such as melanoma. Although the biological mechanisms underlying combinations are not yet well understood, recent third-party clinical studies have demonstrated the potential of combination therapy to achieve high tumor response rates, as are often seen with targeted

therapy, but with greater durability, as is seen with immuno-therapy agents. The combination of targeted and immuno-therapies may generate durable responses with much better survival rates.

We believe that the industry-standard for cancer biology models has not evolved along with current oncology research and drug discovery and thus is an insufficient framework from which to develop the next generation of oncology drugs we envision. In response, we have built a comprehensive cancer biology platform specifically to address a new generation of cancer treatments.

Next-Generation Cancer Biology Platform

Fundamental changes in cancer research led us early in our history to develop a cancer biology platform that incorporates improved models and processes better suited to drug discovery in the new world of immuno-oncology combinations and addresses the importance of tumor-immune system interactions and the value of primary biopsies. Conventional models for oncology drug discovery have used cultured cell lines that are often decades old and have characteristics that are not representative of the tumors in actual cancer patients. In addition, tumors from these cell lines have been transplanted in immune-compromised hosts in commonly-used xenograft tumor models. Therefore, animal models utilizing these cell lines have limited predictive value for new therapies. While animal models derived from surgical samples, such as patient-derived xenograft models, or PDX models, are an improvement over the old cell lines, a surgical sample is unlikely to represent the state of the cancer at the time of intended treatment. Because conventional models, including PDX models, require the use of immune-deficient animals, they cannot mimic interactions between the tumor and the host immune system.

The cancer biology platform we developed enables us to test a large panel of tumor models for sensitivity to the drug candidates we generated, identify drug-resistance mechanisms in many cancers, explore combination strategies and regimens, and improve our understanding of the contributions of tumor micro- and macro-environments in cancer treatments.

Scientific Approach.  Our platform brings together the following:

·                  Access to a broad array of primary patient biopsies and tissue samples, enabled by our proximity to and partnerships with leading China-based oncology centers, allows us to build novel in vivo, ex vivo and in vitro models that we believe more accurately represent patients’ cancer disease states at the time of treatment.

·                  Methods for better approximating the interactions between a tumor and a patient’s immune system, including:

·                  Introduction of elements of the human immune system into our in vivo, ex vivo and in vitro models; and

·                  Creation of a variety of novel assays to investigate the effects of drug combinations and study their impacts on the human immune system and the tumor microenvironment.

·                  An effective screening cascade for oncology drug development that incorporates all of these elements.

Sustainable Leadership Position.  We believe that our early recognition of the importance of tumor-immune system interactions and the value of primary biopsies in developing new models for future cancer research has allowed us to develop a proprietary cancer biology platform that provides significant competitive advantages in developing the next generation of cancer therapeutics.

We believe that several of these advantages are sustainable:

·                  Our close relationships with clinicians and our proximity to major oncology centers in China provide us convenient and difficult-to-replicate access to primary tissue samples that greatly enhance the effectiveness of our oncology models.

·                  Our time and effort in developing and validating new models and processes, through the commitment and focus of our large scientific team, has allowed us to advance our capabilities meaningfully ahead of many current cancer drug development approaches. Over the last five years, our team of over 50 biologists has been focused on the continued development of our cancer biology platform.

·                  Our non-hierarchical structure and highly cooperative organizational culture allows us to access the cross-functional capabilities needed to develop, maintain and continually improve our new generation cancer biology platform.

Our robust preclinical and clinical pipeline demonstrates our significant commitment and ability to devote the necessary time, energy and resources required to build, validate and continue to advance our cancer biology platform. Our platform has enabled us to advance four candidates to the clinic and to become, we believe, one of only two companies today to wholly own both a clinical-stage BTK inhibitor and PD-1 inhibitor and one of the few companies to have discovered and advanced to clinical stage, a PARP inhibitor and PD-1 inhibitor, or a BRAF inhibitor and PD-1 inhibitor, for use as combination therapy. We believe that our cancer biology platform is critical to developing rational combinations that enable us to become a leader in next-generation cancer therapies.

Our Products

We have used our cancer biology platform to develop four clinical-stage drug candidates that we believe have the potential to be best-in-class or first-in-class. In addition, we believe that each has the potential to be an important component of a drug combination addressing major unmet medical needs.

Moreover, we believe that compounds in our clinical and preclinical pipeline have the potential to be first-in-class therapeutics in China, and, as locally developed compounds, to qualify for a separate, and potentially accelerated, regulatory path.

Over time, we intend to strengthen our position with additional drug combinations utilizing our own drugs and in some cases third-party drugs to compete globally as first-in-combination and best-in-combination cancer therapies.

Our Initial Clinical Candidates

We have a pipeline of four clinical-stage drug candidates. Based on preclinical and clinical data, we believe all of our drug candidates have the potential of becoming, alone and in combination, demonstrably better than drugs currently approved to treat several types of cancers. We believe our research team’s discovery of these drug candidates and our extensive preclinical portfolio of drug candidates demonstrates the value of our proprietary cancer biology platform.

The following table summarizes our clinical pipeline:

(1) Limited collaboration with Merck KGaA.

(2) Partnered with Merck KGaA outside China.

BGB-3111 is a potent and highly selective small molecule BTK inhibitor. We are currently developing BGB-3111 as a monotherapy and in combination with other therapies for the treatment of a variety of lymphomas. BGB-3111 has demonstrated higher selectivity against BTK and higher exposure than ibrutinib, the only BTK inhibitor currently approved by the FDA and the European Medicines Agency, or EMA.

We have completed the dose-escalation phase of our clinical trial in Australia, and we are currently conducting the dose-expansion phase in patients with different subtypes of B-cell malignancies, including chronic lymphocytic leukemia, diffuse large B-cell lymphoma, follicular lymphoma, mantle cell lymphoma, marginal zone lymphoma and Waldenström’s Macroglobulinemia. We have initiated a combination trial with obinutuzumab, an anti-CD20 monoclonal antibody recently approved for chronic lymphocytic leukemia in the United States. We have dosed over 100 patients with BGB-3111 in monotherapy and combination trials as of March 25, 2016. In the completed dose-escalation phase of our clinical trial, no protocol-defined dose-limiting toxicities, or treatment discontinuations due to drug-related adverse events were observed. BGB-3111 achieved up to approximately a 3.5- to 7-fold higher exposure level than the approved doses of ibrutinib. Proof-of-concept has been established for BGB-3111 with clinical data indicating that BGB-3111 is a potent BTK inhibitor with objective anti-tumor activity observed in multiple types of lymphomas starting at the lowest dose tested, 40 mg once daily, or QD. In addition, sustained BTK occupancy was achieved in the lymph node for both 320 mg QD and 160 mg twice daily, or BID, dosing regimens.

We plan to advance BGB-3111 to global registration studies in 2016, pending feedback from regulatory authorities. In addition to monotherapy studies and a combination trial with obinutuzumab, we plan to initiate a combination trial of BGB-3111 with BGB-A317, our proprietary PD-1 monoclonal antibody, in blood-borne and solid organ tumors.

We also filed a Clinical Trial Application in China in December 2014 and received CTA approval in February 2016 for all phases of clinical testing. We believe that BGB-3111 is the first BTK inhibitor being developed in China under the domestic regulatory pathway to enter the clinic. We plan to initiate registration studies for BGB-3111 in China in 2016.

BGB-A317 is ainvestigational humanized monoclonal antibody against the immune checkpoint receptor PD-1. We are developing BGB-A317 asligand PD-L1.

In 2017, we entered into a monotherapy and as a combination agent for various solid-organ and blood-borne cancers. PD-1 is a cell surface receptor that plays an important rolestrategic collaboration with Celgene Corporation, or Celgene, in down-regulating the immune system by preventing the activation of certain types of white blood cells called T-cells. PD-1 inhibitors remove the blockade of immune activation by cancer cells.

We believe BGB-A317 is differentiated from the currently approved PD-1 antibodies with the ability to bind Fc gamma receptor I, or FcγRI, specifically engineered out, andwhich we believe this could potentially result in improved activities. In addition, BGB-A317 has a unique binding signature to PD-1 with high affinity and superior target specificity.

We are evaluating BGB-A317 in the ongoing dose-escalation phase of our clinical trial in relapsed or refractory solid tumor patients and a combination trial with our PARP inhibitor, BGB-290, in Australia. We have dosed over 100 patients as of March 25, 2016.

With an ongoing clinical trial in Australia, we believe that BGB-A317 is the first PD-1 antibody being developed in China under the domestic regulatory pathway to enter the clinic.

BGB-290 is a molecularly targeted, orally available, potent and highly selective inhibitor of PARP1 and PARP2. We are currently developing BGB-290 as a monotherapy and in combination with other therapies for the treatment of homologous recombination deficient cancers, which are cancers that contain abnormalities in their DNA molecule repair mechanisms, making these cancers particularly sensitive to PARP inhibitors. On February 2, 2016, we initiated a trial with BGB-290 in combination with BGB-A317 for the treatment of cancers with mutations in the BRCA gene or deficiencies in homologous recombination or mismatch repair, including ovarian, breast, prostate, colorectal, and pancreatic cancers, as well as platinum-sensitive ovarian cancer. We plan to initiate combination trials with chemotherapies for the treatment of gastric cancer, small cell lung cancer, and glioblastoma.

We believe BGB-290 has the potential to be differentiated from other PARP inhibitors, including olaparib, the only PARP inhibitor currently approved by the FDA and the EMA, in terms of selectivity, DNA-trapping activity, oral bioavailability and brain penetration.

We are evaluating BGB-290 in the ongoing dose-escalation phase of our clinical trial in Australia. We have dosed over 50 patients with BGB-290 in monotherapy and combination trials as of March 25, 2016. Initial analysis of data from this trial has shown BGB-290 to be well-tolerated. Proof-of-concept has also been established, with anti-tumor activity seen starting at the lowest tested dose and data suggestive of a wide therapeutic window.

With an ongoing clinical trial in Australia, we believe BGB-290 is the first PARP inhibitor being developed in China under the domestic regulatory pathway to enter the clinic.

BGB-283 is a small molecule RAF inhibitor. We are currently developing BGB-283 as a monotherapy and in combination with other therapies for the treatment of cancers with aberrations in the mitogen-activated protein kinase, or MAPK, pathway, including BRAF mutations and KRAS/NRAS gene mutations where first generation BRAF inhibitors are not effective. The MAPK pathway is a chain of proteins in the cell that communicates a signal from a receptor on the surface of the cell to the DNA in the nucleus of the cell. This pathway plays an essential role in regulating cell proliferation and survival and is described in more detail in the section titled “—Product Pipeline—BGB-283, RAF Dimer Inhibitor—Mechanism of Action.” We intend to develop BGB-283 to treat various malignancies, including colorectal cancer, non-small cell lung carcinoma, endometrial cancer, ovarian cancer, pancreatic cancer and papillary thyroid carcinoma. We believe BGB-283 has the potential to be a first-in-class RAF dimer inhibitor globally.

Currently approved first-generation BRAF inhibitors, vemurafenib and dabrafenib, are only active against the BRAF monomer. However, dimerization has been reported to be one of the key mechanisms of resistance to first generation BRAF inhibitors. BGB-283 inhibits not only the monomer but also the dimer forms of BRAF. BGB-283

·                  A fast track drug registration or clinical trial approval pathway will be available for the following applications: (1) registration of innovative new drugs treating HIV, cancer, serious infectious diseases and orphan diseases; (2) registration of pediatric drugs; (3) registration of geriatric drugs and drugs treating China-prevalent diseases; (4) registration of drugs sponsored by national science and technology grants; (5) registration of innovative drugs using advanced technology, using innovative treatment methods, or having distinctive clinical benefits; (6) registration of foreign innovative drugs to be manufactured locally in China; (7) concurrent applications for new drug clinical trials which are already approvedsolid tumors in the United States, or European Union or concurrentEurope, Japan, and the rest of the world outside of Asia. We retained rights to tislelizumab for solid tumors in Asia (ex-Japan) and for hematological malignancies and internal combinations globally. In connection with the Celgene collaboration, we obtained an exclusive license to market Celgene’s approved cancer therapies ABRAXANE®, REVLIMID®, and VIDAZA® in China, excluding Hong Kong, Macau and Taiwan, which has allowed us to generate product revenue in China since September 2017.  We also obtained Celgene’s commercial operations and personnel in China, which we expect to expand in preparation for the potential launch of our own internally-developed drug registration applications for drugs whichcandidates and our other in-licensed drug candidates in China.

We initially started as a research and development company in Beijing in 2010, and have applied for marketing authorizationsince become a fully-integrated global biopharmaceutical company with operations in China in Beijing, Suzhou, Guangzhou and passed onsite inspectionsShanghai and operations in the United States or European Unionin Cambridge, MA; Fort Lee, NJ; and are manufactured using the same production lineEmeryville and San Mateo, CA.  As of January 1, 2018, we had a global team of over 900 employees, including a research team of over 150 employees in China; and (8)Beijing, a clinical trial applications for drugs with urgent clinical need and patent expiry within three years, and marketing authorization applications for drugs with urgent clinical need and patent expiry within one year.

In February 2016, the CFDA released the Opinions on Priority Review and Approval for Resolving Drug Registration Applications Backlog, which further clarified the following policies potentially accelerating the approval processteam of certain clinical trials or drug registrations which may benefit us:

·                  A fast track drug registration or clinical trial approval pathway will be available for the following drug registration applications with distinctive clinical benefits: (1) registration of innovative drugs not sold within or outside China; (2) registration of innovative drug transferred to be manufactured in China; (3) registration of drugs using advanced technology, using innovative treatment methods, or having distinctive treatment advantages; (4) clinical trial applications for drugs patent expiry within three years, and marketing authorization applications for drugs with patent expiry within one year; (5) concurrent applications for new drug clinical trials which are already approvedover 300 employees in the United States, or European Union, or concurrent drug registration applications for drugs which have applied for marketing authorizationChina and passed onsite inspections in the United States or European Union and are manufactured using the same production line in China; (6) traditional Chinese medicines (including ethnic medicines) with clear position in prevention and treatment of serious diseases; and (7) registration of new drugs sponsored by national key technology projects or national key development projects.

·                  A fast track drug registration approval pathway will be available for the following drugs registration application with distinctive clinical benefits for prevention and treatment of HIV, phthisis, virus hepatitis, orphan diseases, cancer, children’s diseases, and geriatrics.

In March 2016, the CFDA released a circular, CFDA Announcement on Reforms of Pharmaceutical Registration Classification, which outlined the re-classifications of drug applications. Under the new categorization, innovative drugs that have not been approved either in or outside China remain Category 1, while drugs approved outside China seeking marketing approval in China are now Category 5.

The CFDA is soliciting public opinions on detailed policies regarding fast track clinical trial approval and drug registration pathway, and we expect that the CFDA review and approval process will improve over time.

Regulatory Framework for Novel Drugs in China

The CFDA categorizes domestically-manufactured innovative drug applications as Category 1 and imported innovative drug applications as Category 3.  Until a recent CFDA announcement issued on March 4, 2016, these different types of applications were known as Category 1 and Category 3 applications, respectively.

Most Chinese companies’ applications are filed in Category 1 if the drug has not already been approved by the FDA or EMA. Most multinational pharmaceutical companies’ drug registration applications are filed in Category 3.

These two categories have distinct approval pathways as discussed below.

Domestic Innovative Drug Registration Process

For domestically manufactured innovative drug applications, companies are required to obtain approval of a Clinical Trial Application before conducting Phase 1 clinical trials in China. The domestic innovative drug registration pathway has a fast track review and approval mechanism if the drug candidate is on a national priority list. We believe the local drug registration process is a faster and more efficient path to approval in the Chinese market than Category 3.

Imported Innovative Drug Registration Process

For a drug that has received marketing approval in other countries, but is not yet approved in China, in order to market an imported drug in China, companies must apply for an Import Drug License, or IDL, after the drug has received marketing approvalAustralia, and a Certificategrowing commercial team of Pharmaceutical Product, or CPP, from a major foreign drug regulatory authority, such as the FDA or EMA. Compared with the domestic innovative registration process, the imported innovative drug registration process is more complex and evolving.

The first step in the process after receipt of a CPP, is to obtain approval of a Clinical Trial Application to conduct registration studies. A pharmacokinetic study in Chinese subjects is also required. Once this study is completed, the applicant must submit the clinical data package to the CFDA along with other required information for the issuance of an IDL. The total IDL approval process has typically taken more than five years from the receipt of foreign marketing approval.

Currently, the most common strategy for multinational companies is using multi-regional clinical trial, or MRCT, data to support IDL approval. Companies can apply to conduct these MRCTs prior to receiving global regulatory approval, with China as a subset within a broader MRCT. However, these MRCTs are often not designed in a way that accounts for the unique characteristics of the Chinese patient population and local standards of care. If the MRCT data does not meet the CFDA’s registration requirements, the company may be required to conduct additional local clinical trials that can potentially delay market access in China for imported drugs by an additional three to four years.

The Chinese State Council and the CFDA have recently issued several statements and circulars aimed at improving and accelerating the new drug approval process in general. These include the August 2015 statement issued by the State Council, Opinions on reforming the review and approval process for pharmaceutical products and medical devices; the November 2015 CFDA No. 230 Circular, Circular Concerning Several Policies on Drug Registration Review and Approval; February 2016 CFDA Circular, Opinions on Priority Review and Approval for Resolving Drug Registration Applications Backlog; and the March 2016 CFDA No. 51 Circular, Announcement on Reforms of Pharmaceutical Registration Classification issued by the CFDA on March 4, 2016. In the March 4, 2016 CFDA announcement, the drugs approved outside China seeking marketing approval in China are now called Category 5. We believe these new regulatory initiatives will likely accelerate the approval process for new drugs, including those marketed in other countries but not yet in China. However, how and when this approval process will be changed is still subject to further policies to be issued by the CFDA and is currently uncertain.

Our drug candidates are all new therapeutic agents and we have built research and development, clinical trial capabilities, and commercial manufacturing facilities in China. As a result, we expect that all of our current drug candidates will fall within the Category 1 application process. For example, we filed a Clinical Trial Application for BGB-283 as Category 1 and recently received CFDA approval for conducting clinical trialsover 200 employees in China. In July 2015addition, we have a facility in Suzhou for the CFDA approved our Clinical Trial Application including all phasesmanufacture of our clinical trialscommercial-scale small molecule and pilot-scale biologics, and another facility under construction in Guangzhou for BGB-283. In February 2016 the CFDA approved our Clinical Trial Application including all phasesmanufacture of our clinical trials for BGB-3111. We have filed similar Clinical Trial Applications for BGB-290 and BGB-A317.commercial-scale biologics.

In addition to the structural and clinical advantages afforded to us by basing our research and development operations in China, we see an attractive and growing commercial oncology opportunity in our home market. We continue to retain commercial rights in China for all four of our clinical programs and all preclinical programs.

China’s Pharmaceutical Market

China’s pharmaceutical market has grown robustly and replaced Japan as the second largest pharmaceutical market in 2013, according to IMS Health. According to the IMS Market Prognosis published in March 2015, the Chinese pharmaceutical market was $109 billion in 2014, as compared to a $373 billion U.S. pharmaceutical market in 2014, and is expected to grow at a compound annual growth rate, or CAGR, of 9.3% over the next five years reaching $171 billion by 2019. The growth of the Chinese pharmaceutical market is attributable, in particular to:

Our Strategy

·                  An aging population, modern diet, lack of exercise and environmental issues that are increasing the prevalence of chronic diseases.

·                  Increases in disease prevalence, awareness, diagnostics and treatment rates.

·                  The continuous and rapid increase of personal disposable income and the establishment of basic national health insurance coverage; making health care more accessible to more patients.

China provides an opportunity to access largely untapped clinical trial pools and develop drugs for a population for whom global standard of care therapies are not available. China has nearly a quarter of the world’s cancer patient population and one third to half of cancer patients in certain tumor types are in China.

Note: Data from World Health Organization (2012). * New cancer incidences estimated to increase to $19 and $25 million in 2025 and 2035, respectively.

The oncology market in China is estimated to have grown at a CAGR of 24% in the last decade through 2014. In recent years, sales of targeted therapy drugs in retail channels have increased rapidly. Although expensive targeted therapy drugs are not included in basic national healthcare insurance and have historically had very little coverage by provincial insurance plans, the targeted therapy drug market has continued to grow rapidly despite being an out-of-pocket market. This growth is attributable to patients’ needs, willingness to pay and newly launched drugs.

2014 revenue for targeted oncology therapies in China (USD in millions) and two year historical CAGRs

Source: CFDA Southern Medicine Economic Research Institute

Introduction of Reimbursement

The State Council requires central and provincial authorities across the PRC to promote a medical insurance program for major illnesses. By the end by 2015, all urban and rural residents covered by basic medical insurance programs are required to be covered by the insurance program for major illnesses, according to a State Council policy issued on July 28, 2015. As a complement to basic insurance programs, this program is required to cover at least 50% of the medical cost incurred in connection with treating major illnesses and is supplemental to basic insurance programs. The State Council now requires provincial authorities to increase reimbursement rates over the next three years.

According to the PRC Central Government’s guidance issued in March 2015, each province will decide which drugs to include in its provincial major illness reimbursement lists and the percentage of reimbursement, based on local funding. For example, Zhejiang province, located in the Yangtze river delta area with a population of 55 million, announced its provincial major illness drug reimbursement list in early 2015. The list includes 31 high-priced drugs, 15 of which are targeted therapy agents for cancer, including Glivec, Ireesa, Erbitux, Herceptin, and Rituxan. Although it will take three years to establish comprehensive national coverage, the affordability of the high-priced, novel cancer agents to Chinese patients will improve significantly and the targeted therapy market is expected to enter a rapid growth period.

Our Mission and Strategy

Our mission is to become a global leader in the discovery,  development and developmentcommercialization of innovative, molecularly targeted and immuno-oncology drugs for the treatment of cancer. To achieve our mission, over the last several years we intendhave developed broad internal capabilities from research to pursue the following strategies:

·Rapidly advance our pipeline programs through global development.  In the next 12 months,clinical development, manufacturing and commercialization platforms in China. We have a portfolio of cancer therapeutics consisting of three marketed products in China, as well as five development-stage and two development-stage-ready drug candidates, that we plan to make significant advances within our clinical-stage pipeline. For BGB-3111, we have initiated a monotherapy dose-expansion trial for a variety of lymphomas. For BGB-A317, we plan to initiate a monotherapy dose-expansion trial for various cancers. For BGB-290, we plan to initiate a monotherapy dose-expansion trial in selected tumor types that may have sensitivity to PARP inhibition. For BGB-283, we have initiated a monotherapy dose-expansion trial for a variety of BRAF, KRAS and NRAS mutated cancers. For BGB-3111 and BGB-283, we will continue to enroll multiple expansion cohortsexpand through both internal research and significantly increasebusiness development efforts.  In the near term, we are focused on pursuing three significant opportunities:

·Pursue global development of combination therapies.  We believe our ownership of both molecularly targeted and immuno-oncology drugs puts us in an advantageous position to develop potentially best-in-combination or first-in-combination therapies that could produce high rates of more durable responses in patients. We have four clinical-stage, independently discovered drug candidates in important and combinable molecularly targeted and immuno-oncology drug classes including BTK inhibitor, PD-1 inhibitor, PARP inhibitor and RAF dimer inhibitor. We believe that we are one of only two companies today to wholly own bothour experience in China as a clinical-stage BTK inhibitor and PD-1 inhibitor and one of the few companies to have discovered, and advanced to clinical stage, a PARP inhibitor and PD-1 inhibitor, or a BRAF inhibitor and PD-1 inhibitor, for use as combination therapy. In addition to monotherapy trials, we are planning combination trials using internally discovered drug candidates as well as third-party agents. For BGB-3111, in January 2016 we initiated a combination trial with the anti-CD20 antibody, obinutuzumab, and we plan to initiate a combination trial with BGB-A317. For BGB-283, we plan to initiate combination trials with other agents such as chemotherapy and BGB-A317. For BGB-290, we plan to initiate a combination trial with temozolomide and initiated a combination trial with BGB-A317 on February 2, 2016. For BGB-A317, in addition to our combination trial with BGB-290, we plan to initiate combination trials with our other clinical-stage molecularly targeted drug candidates.

·Continue to use our cancer biology platform to discover additional candidates with best-in-class characteristics and potential for use in rational combinations.  We plan to use our cancer biology platform to discover additional drug candidates with the potential to be best-in-class monotherapies and also important components of multiple-agent combination regimens. In the last five years, we have been successful in discovering four clinical stage and numerous promising preclinical drug candidates. By further investing in and improving our cancer biology platform, we expect that the platform will continue to help us select relevant drug targets, identify potential best-in-class drug candidates and develop regimens for rational drug combinations.

·Bring transformative oncology therapeutics to our home market in China.  We aredomestic company committed to addressing the needsglobal standards of cancer patients in our home market. China is one of the largestinnovation and fastest growing markets for cancer drugs worldwide, representing approximately 20–25% of the world’s cancer population and an even greater proportion in lung, liver, and gastric cancers. Because many global standard-of-care therapies are not currently approved and available in China, there is a significant unmet need for innovative cancer drugs for patients who are naive to such treatments. In addition, focusing on cancer types of high prevalence in China will aidquality, our global development effortsteam and strategy, and our research, development, manufacturing and commercial capabilities in these indications. We plan to seek approval from the CFDA for our cancer drugs as domestic Category 1 drugs and strive to have our drug candidates selected and listed as national priorities. The ability to launch our cancer drugs in our home market, which has a large patient population, will also help us establish broad safety and efficacy profiles for each drug, enablingChina, all uniquely position us to build a full portfolio for future drug combinations.capitalize on these opportunities.

·Maintain our culture as we grow our business globally.  We believe our science-driven, cooperativeOur Pipeline and non-hierarchical culture is a key strength of our organization and will continue to be instrumental to our success. As an innovative biotechnology company with research facilities in China, we have been able to attract an internationally trained research team of over 110 talented scientists. Many members of our team moved back to China from other countries to join us because they share our goals of advancingCommercial Products

The following table summarizes the discovery and development of drugs in China and of working with Chinese clinicians to treat their patients with innovative and effective drugs not currently available to them. We intend to maintain our patient-focused and research-driven culture as we discover and develop new drugs for China and the rest of the world.

·Retain the valuestatus of our pipeline in our core focus area of oncology.  We currently collaborate with Merck KGaA on our BGB-283 program, but retain exclusive development and commercial rightsproducts as of February 28, 2018:

Abbreviations: Dose Esc = dose escalation; Dose Exp = dose expansion; WM = Waldenstrom’s macroglobulinemia; 1L = first line; CLL = chronic lymphocytic leukemia; SLL = small lymphocytic lymphoma; R/R = relapsed / refractory; FL = follicular lymphoma; 2L = second line; NSCLC = non-small cell lung cancer; HCC = hepatocellular carcinoma; ESCC = esophageal squamous cell carcinoma; HL = Hodgkin’s lymphoma; UC = urothelial carcinoma; gBRCA = germline BRCA; TMZ = temozolomide; RT = radiotherapy; IMiD = immunomodulatory drugs; MM = multiple Myeloma; ND = newly diagnosed; NHL = non-Hodgkin’s lymphoma; MDS = myelodysplastic syndrome; AML = acute myeloid leukemia; CMMoL = chronic myelomonocytic leukemia; DLBCL = diffuse large B-cell lymphoma;

*Some indications will not require a non-pivotal Phase 2 clinical trial prior to beginning pivotal Phase 2 or 3 clinical trials.

**Confirmatory clinical trials post-approval are required for accelerated approvals.

***REVLIMID® approved as a combination therapy with dexamethasone.

1  Celgene has the right to develop and commercialize tislelizumab in China, subject to certain non-compete restrictions. Additionally, we currently retain all worldwide developmentsolid tumors in the United States, Europe, Japan and commercial rights for our other clinical and preclinical therapeutics. We also have a limitedthe rest-of-world outside of Asia.

2Limited collaboration with Merck KGaA on our BGB-290 PARP program. We intend to protect our ability to direct global preclinical studies and clinical trials for our drug candidates as monotherapy and combination therapy and to maintain exclusive rights in our home market. However, we may opportunistically evaluate additional collaboration opportunities that could increase the value of our programs by accessing the expertise or infrastructure of strategic collaborators or by developing drug candidates with potential applications outside of our strategic focus on cancer.KGaA.

Our Clinical-Stage Drug Candidates

Product Pipeline

BGB-3111,Zanubrutinib (BGB-3111), a Bruton’s Tyrosine Kinase Inhibitor

BGB-3111Zanubrutinib is a potent and highly selectivean investigational small molecule inhibitor of BTK inhibitor. We arethat is currently developing BGB-3111being evaluated in a broad pivotal clinical program globally and in China as a monotherapy and in combination with other therapies for the treatment of a variety ofto treat various lymphomas. BGB-3111Zanubrutinib has demonstrated higher selectivity against BTK than ibrutinib, the only IMBRUVICA® (ibrutinib) an approved

BTK inhibitor, currently approved by the FDA and EMA and appears to exhibit greater target inhibition as well.

We have completed the dose-escalation phase of our clinical trial in Australia, and we are currently conducting the dose-expansion phase in patients with select lymphoid malignancies including chronic lymphocytic leukemia, diffuse large B-cell lymphoma, follicular lymphoma, mantle cell lymphoma, marginal zone lymphoma and Waldenström’s Macroglobulinemia. We have initiated a combination study with obinutuzumab, an anti-CD20 monoclonal antibody recently approved for chronic lymphocytic leukemia in the United States. We have dosed over 100 patients with BGB-3111 in monotherapy and combination trials as of March 25, 2016. In the completed dose-escalation phase of our clinical trial, no protocol-defined dose-limiting toxicities, or treatment discontinuations due to drug-related adverse events were observed. BGB-3111 achieved up to approximately a 3.5- to 7-foldbased on biochemical assays, higher exposure level than ibrutinib based on their respective Phase 1 experience in separate studies, and sustained 24-hour BTK occupancy in both the approved doses of ibrutinib. Proof-of-concept has been established for BGB-3111 with clinical data indicating that BGB-3111 is a potent BTK inhibitor with objective anti-tumor activity observed in multiple types of lymphomas starting at the lowest dose tested, 40 mg QD.peripheral blood and lymph node compartments.

Mechanism of Action

BTK is a key component of the B-cell receptor, or BCR, signaling pathway and is an important regulator of cell proliferation and cell survival in various lymphomas. BTK inhibitors block BCR-induced BTK activation and its downstream signaling, leading to growth inhibition and cell death in certain malignant white blood cells called B-cells. BGB-3111Zanubrutinib is an orally active inhibitor of BTK that covalently binds to the cysteine Cys-481 of BTK, resulting in irreversible inactivation of the kinase. Nine other kinases in the human genome, including ITK, EGFRenzyme.

Market Opportunity and JAK3, contain this similar cysteine residue. It has also been shown that BTK inhibitors can inhibit solid tumor growth by regulating the tumor microenvironment in preclinical animal models.

Market Opportunity

Competition

Lymphomas are a group of blood-borne cancers involving lymphatic cells of the immune system. They can be broadly categorized into non-Hodgkin’s lymphomas, chronic B-cell leukemias, predominantly chronic lymphocytic leukemia,or NHL, and acute B-cell leukemias.HL. Depending on the origin of the cancer cells, lymphomas are also characterized

as B-cell or T-cell lymphomas. B-cell lymphomas make up approximately 85% of non-Hodgkin’s lymphomasNHLs and comprise a variety of specific diseases involving B-cells at differing stages of maturation or differentiation. Preliminary dataAccording to the statistics from animal models involving BGB-3111the Surveillance, Epidemiology and third-party BTK inhibitors also suggest potential applicationsEnd Results, or SEER, program of the U.S. National Cancer Institute, there were 72,240 new NHL cases and 20,140 deaths, and 20,110 new CLL cases and 4,660 deaths in solid tumors2017 in the United States. According to a published study (Chen et al., Cancer Statistics in China, 2015, CA Cancer J. Clin. 2016; 66(2):115-32), which we refer to as Chen et al. 2016, and inflammatory diseases, which could substantially expand our market opportunity.

Current TherapiesGLOBOCAN 2012 analyses on cancer statistics in China, there are an estimated 42,000 to 88,000 new lymphoma cases and Limitations

26,000 to 53,000 deaths in China each year. 

Conventional methods of treatment oftreating lymphomas vary according to the specific disease or histology, but generally include chemotherapy, antibodies directed at CD20, and, less frequently, radiation. Recently, significant progress has been made in the development of new therapies for lymphomas, including BCR signalingBTK inhibitors, primarily with the BTK inhibitor ibrutinib and the PI3K delta inhibitor, idelalisib.idelalisib, and the Bcl-2 inhibitor, venetoclax. In addition, there are other inhibitors of BCR signaling pathways in development, such astargeting PI3K delta/gamma, IRAK4 and SYK.SYK, for example.

The BTK inhibitor ibrutinib was first approved by the U.S. Food and Drug Administration, or the FDA, in 2013 for the treatment of patients with mantle cell lymphomaMCL who have received at least one prior therapy. Since 2013, ibrutinib has received supplemental FDA approvals for the treatment of patients with chronic lymphocytic leukemiaCLL, CLL patients with 17p deletion, patients with WM, patients with marginal zone lymphoma, or MZL, who have received at least one prior anti-CD20-based therapy, chronic lymphocytic leukemia patients with 17p deletion, and patients with Waldenström’s Macroglobulinemia.chronic graft versus host disease after failure of one or more lines of systemic therapy. Ibrutinib is also approved by the European Medicines Agency, or the EMA, for treatment of patients with relapsedMCL, CLL, or refractory mantle cell lymphoma,WM. Ibrutinib has been approved in over 40 countries, and it was approved and launched in China at the end of 2017. Reported global sales of ibrutinib were approximately $3.2 billion in 2017. Another BTK inhibitor, CALQUENCE® (acalabrutinib) was approved by the FDA in 2017 under accelerated approval for the treatment of patients with chronic lymphocytic leukemiaMCL who have received at least one prior therapy, or first line in chronic lymphocytic leukemia patients with 17p deletion or TP53 gene mutation and are unsuitable for chemoimmunotherapy. The EMA has also accepted an application for potential label expansion for patients with Waldenström’s Macroglobulinemia. Ibrutinib has subsequently been approved in over 40 countries, but not China. Reported U.S. sales of ibrutinib were $492 million in 2014, the first full year after launch, and $267 million in the third quarter of 2015. In addition to the approved indications, positive Phase 3 results have been announced for ibrutinib in treatment-naive chronic lymphocytic leukemia or small lymphocytic lymphoma patients aged 65 or older. Clinical data also suggest that ibrutinib has activity in other common lymphomas, such as diffuse large B-cell lymphoma and follicular lymphoma.therapy.

Despite the clinical and commercial success of ibrutinib, we believe based on its product profile that meaningful differentiation is possible in at least the following aspects:

·Safety and tolerability.  Although ibrutinib has shown a favorable safety profile compared to traditional chemotherapies, it is associated with adverse reactions that can limit its tolerability as a chronic treatment and in some cases can be treatment-limiting or life-threatening. These adverse reactions—including diarrhea, thrombocytopenia, or low blood platelet count, bleeding and atrial fibrillation—are believed to be due to ibrutinib’s broad inhibition of kinases other than BTK, including EGFR, JAK3 and TEC.

·Sustainable target inhibition in disease originating tissue.  Although ibrutinib induced sustained BTK inhibition when measured in the plasma of patients, our preclinical studies of ibrutinib show that target inhibition in disease originating tissues, such as bone marrow and spleen, in mice and rats was not sustained over a 24-hour period.

·Oral bioavailability.  Ibrutinib has shown 7–23% oral bioavailability in preclinical studies, as evidenced by the daily dose of 420 mg or 560 mg required in the clinic.

·Combinability with ADCC-dependent antibodies.  Anti-CD20 agents, such as rituximab, obinutuzumab and ofatumumab, are considered very effective therapies for lymphomas. Several preclinical studies have demonstrated that ibrutinib, potentially due to its inhibitory activity against ITK, interferes with rituximab-medicated ADCC, which is the mechanism by which rituximab and other anti-CD20 antibodies are believed to exert their immune defense activities. Therefore, these preclinical data suggest that the activity of rituximab and other ADCC-dependent antibodies may be reduced when combined with ibrutinib.

Potential Advantages of BGB-3111

We believe, based on our preclinical and clinical data, that BGB-3111 has the potential to be differentiated from ibrutinib in the following aspects:

·Better safety and tolerability.  Based on our preclinical studies, we believe BGB-3111 is more selective than ibrutinib in the inhibition of BTK and has less off target inhibition of other kinases, including EGFR, ITK, JAK3, HER2 and TEC, which we believe are associated with ibrutinib toxicity. Results from our preclinical biochemical and cellular assays show that BGB-3111 has similar potency for BTK as compared to ibrutinib while being less active against other kinase targets than ibrutinib, as reflected by the higher dose required to inhibit half the enzymatic activity, or IC50. Based on the selectivity of BGB-3111 relative to ibrutinib, a 2- to 70-fold higher concentration of BGB-3111 is required to achieve similar levels of inhibition in these other targets as compared to ibrutinib. Therefore, BGB-3111 has the potential to be associated with fewer toxicities. Available data from our completed dose-escalation trial indicate that BGB-3111 achieved up to approximately a 7-fold higher exposure level than the approved doses of ibrutinib.

·More sustained inhibition in disease originating tissue.  In our preclinical studies, BGB-3111 has demonstrated favorable pharmacokinetic properties. The comparatively high drug level of BGB-3111 in disease originating tissue as demonstrated in the clinic could potentially translate into a more complete and sustainable inhibition and a better quality of response than ibrutinib. Ibrutinib demonstrated a dose-dependent BTK occupancy in PBMCs during its dose-escalation study. However, even at 420 mg, its approved dose for chronic lymphocytic leukemia, ibrutinib did not achieve complete or sustained target occupancy in PBMCs in a significant proportion of patients. In addition, BGB-3111’s favorable safety profile may allow higher doses and more frequent dosing, which could result in more sustained target inhibition. This is currently being investigated in the clinic.

·Better oral bioavailability.  BGB-3111 has shown oral bioavailability of 25–47% in our preclinical animal studies. Based on human data generated in our dose-escalation trial compared to reported data for ibrutinib, BGB-3111 has better oral bioavailability than ibrutinib. Pharmacokinetic data from our clinical studies show a robust and dose-dependent increase in drug exposure and the drug exposure of BGB-3111 at 80 mg QD was comparable to that reported for ibrutinib at 560 mg QD. In addition, the free drug concentration of BGB-3111 at 40 mg QD was comparable to that reported for ibrutinib at 560 mg QD. Lastly, pharmacokinetics data for BGB-3111 suggest that there appears to be far less interpatient variability in drug exposure as compared to ibrutinib.

·Better combinability with ADCC-dependent antibodies.  Our preclinical data show that BGB-3111 has less off-target inhibition for ITK than ibrutinib in biochemical and cell models. BGB-3111 displayed a more limited inhibitory effect on rituximab-induced ADCC than ibrutinib in cell-based studies. In a human mantle cell lymphoma xenograft model the addition of rituximab to ibrutinib did not improve tumor activity as compared to ibrutinib as a monotherapy. However, the combination of rituximab and BGB-3111 demonstrated improved anti-tumor activity as compared to either as a monotherapy. We believe this may translate into better activity in patients when BGB-3111 is combined with rituximab or other ADCC-dependent antibody therapies.

Summary of Clinical Results

BGB-3111 has completed the dose-escalation phaseAs of ourJanuary 29, 2018, we have enrolled more than 1,000 patients and healthy adults in clinical trials of zanubrutinib, including trials of zanubrutinib in combination trials with other therapies, which we refer to as combination trials. A multi-center, open-label clinicalPhase 1 trial in Australia and is currently in the expansion-cohort part of the monotherapy trial, and we have initiated a combination trial with obinutuzumab. As of March 25, 2016, over 100 patients have been dosed with BGB-3111 in monotherapy and combination trials.

The dose-escalation phase of our clinical trial for BGB-3111 started in August 2014. The trial,being conducted in Australia, was designedNew Zealand, the United States, and South Korea to assess the safety, tolerability, pharmacokinetic properties and preliminary activity of BGB-3111zanubrutinib as a monotherapy. In the dose-escalation phase of our clinical trial, patients with relapsed or refractory non-Hodgkin’s lymphoma and chronic lymphocytic leukemia were enrolled in five dose cohorts (40, 80, 160, and 320 mg QD; 160 mg BID). No dose-limiting toxicities were encountered and the maximum tolerated dose was not reached. We determined the recommended dose for the dose-expansion phase of our clinical trial based on our pharmacokinetics, pharmacodynamics, safety and efficacy evaluation of BGB-3111. In April 2015, we initiated the multi-cohort dose-expansion phase of the ongoing clinical trialmonotherapy in patients with different subtypes of B-cell malignancies, including chronicWM, CLL/small lymphocytic leukemia, diffuse large B-cell lymphoma, follicular lymphoma, mantle cell lymphoma, marginal zone lymphomaor SLL, FL, and Waldenström’s Macroglobulinemia.

MCL. The initial results of the dose-escalation phase and dose-expansion phase of our clinicalthis trial showdemonstrated that, consistent with BGB-3111’szanubrutinib’s pharmacokinetic profile, complete and sustained 24-hour BTK occupancy in the blood was demonstratedobserved in all tested patients, starting at the lowest dose of 40 mg QD.once daily. In addition, sustained full BTK occupancy was achievedobserved in the lymph nodenodes especially for both 320 mg QD andthe 160 mg BIDtwice daily dosing regimens. No protocol-defined dose-limiting toxicities or treatment discontinuations due to drug-related adverse events were observed during dose escalation. Based on the pharmacokinetics, pharmacodynamics, safety and efficacyregimen.

Waldenstrom’s Macroglobulinemia

On June 15, 2017, we presented data from our clinical trial. Proof-of-concept has been established for BGB-3111 with clinical data indicating that BGB-3111 is a potent BTK inhibitor with objective anti-tumor activity observed in multiple types of lymphomas including chronic lymphocytic leukemia, mantle cell lymphoma, and Waldenström’s Macroglobulinemia.

In January 2016, we initiated a combinationPhase 1 trial of BGB-3111 with the CD20 antibody obinutuzumab in patients with chronic lymphocytic leukemia and other lymphomas. In addition,WM at the 14th International Conference on the basisMalignant Lymphoma in Lugano, Switzerland. As of the supportive preclinical combination data discussed below,cutoff of March 31, 2017, 48 WM patients were enrolled in the study. Responses were determined according to the modified Sixth International Workshop on WM Criteria.

Zanubrutinib was observed to be generally well-tolerated with no discontinuation for zanubrutinib-related toxicity. Adverse events, or AEs, were generally mild in severity and self-limited. The most frequent AEs (>10%) of any attribution among 48 patients evaluable for safety were petechiae/purpura/contusion (35%), upper respiratory tract infection (31%), constipation (25%), diarrhea (19%), epistaxis (19%), nausea (17%), cough (15%), anemia (15%), headache (15%), neutropenia (13%), and rash (13%), all of which were grade 1 or 2 in severity except for grade 3 or 4 anemia and neutropenia (8% each) as well as grade 3 or 4 diarrhea and headache (2% each). Five serious adverse events, or SAEs, were assessed to be possibly related to zanubrutinib. These included one case each of hemothorax, atrial fibrillation, colitis, febrile neutropenia, and headache. Among AEs of special interest, there were a total of three cases of atrial fibrillation (all grade 1 or 2), and one case of serious hemorrhage (hemothorax), defined as grade 3 or higher hemorrhage or central nervous system hemorrhage of any grade. Three events led to treatment discontinuation, including one case each of bronchiectasis, prostate adenocarcinoma, and adenocarcinoma of pylorus.

At the time of the data cutoff, 42 patients were evaluable for response. Patients not evaluable for efficacy included two patients with less than 12 weeks of follow-up, three patients with immunoglobulin M, or IgM, < 500mg/dl at baseline, and one patient with inaccurate baseline IgM due to cryoprotein. At a median follow-up of 12.3 months (4.4–30.5 months), the overall response rate, or ORR, was 90% (38/42 patients) and the major response rate was 76% (32/42 patients), with very good partial responses, or VGPRs, in 43% (18/42) of patients and partial responses, or PRs in 33% (14/42) of patients. There were two cases of disease progression.

Chronic Lymphocytic Leukemia / Small Lymphocytic Lymphoma

At the same conference, on June 14, 2017, we planalso presented the data in patients with CLL/SLL from the same trial. As of the data cutoff of March 31, 2017, 69 patients with CLL or SLL (18 treatment naïve, or TN, 51 relapsed/refractory, or R/R) were enrolled in the trial.

Zanubrutinib was shown to explorebe generally well-tolerated in CLL/SLL. The most frequent AEs (≥10%) of any attribution were petechiae/purpura/contusion (46%), fatigue (29%), upper respiratory tract infection (28%), cough (23%), diarrhea (22%), headache (19%), hematuria (15%), nausea (13%), rash (13%), arthralgia (12%), muscle spasms (12%), and urinary tract infection (12%). All of these events were grade 1 or 2 except for one case of grade 3 purpura (subcutaneous hemorrhage), which was the combinationonly major bleeding event. Additional AEs of BGB-3111interest included one case of each grade 2 diarrhea and grade 2 atrial fibrillation. A total of 18 SAEs occurred in 13 patients, with no SAE occurring in more than one patient. Only one patient discontinued treatment due to an AE, a grade 2 pleural effusion.

At the time of the data cutoff, 66 patients (16 TN and 50 R/R) had more than 12 weeks of follow-up and were evaluable for efficacy, and three other patients had less than 12 weeks of follow-up. After a median follow-up of 10.5 months (2.2–26.8 months), the ORR was 94% (62/66) with complete responses, or CRs, in 3% (2/66), PRs in 82% (54/66), and PRs with lymphocytosis, or PR-Ls, in 9% (6/66) of patients. Stable disease, or SD, was observed in 5% (3/66) of patients. The patient with pleural effusion discontinued treatment prior to week 12 and was not evaluable for response. There was one instance of Hodgkin’s transformation. In TN CLL/SLL, at a median follow-up time of 7.6 months (3.7–11.6 months), the ORR was 100% (16/16) with CRs in 6% (1/16), PRs in 81% (13/16) and PR-Ls in 13% (2/16) of patients. In R/R CLL/SLL, at a median follow-up time of 14.0 months (2.2–26.8 months), the ORR was 92% (46/50) with CRs in 2% (1/50), PRs in 82% (41/50), and PR-Ls in 8% (4/50) of patients. SD was observed in 6% (3/50) patients.

Other Lymphomas

On December 9, 2017, we presented additional data from our PD-1 antibody, BGB-A317,Phase 1 trial at the 59th American Society of Hematology, or ASH, Annual Meeting in diseases such asAtlanta, GA. This dataset included 34 patients in an indolent lymphoma cohort, which consisted of 24 patients with FL and 10 patients with MZL, and 65 patients in an aggressive lymphoma cohort, which consisted of 27 patients with diffuse large B-cell lymphoma, or DLBCL, and follicular38 patients with MCL. The median follow-up time was 5.6 months (0.3–22.3 months) and 5.1 months (0.1–31.9) for indolent and aggressive lymphoma, where accelerated development opportunities may be available. respectively.

As of the data cutoff of September 15, 2017, the most frequent AEs (occurring in ≥15% of patients) of any attribution among 34 patients with indolent lymphoma were petechiae/purpura/contusion (24%), upper respiratory tract infection (21%), nausea (18%) and pyrexia (15%). The most frequently reported grade 3 or greater AEs (occurring in ≥5% of patients) of any attribution were anemia (9%), neutropenia (9%), urinary tract infection (6%), and abdominal pain (6%). SAEs were reported in 11 patients (32%). Of those, four patients had SAEs that were considered possibly related to zanubrutinib, including one case each of nausea, urinary tract infection, diarrhea, and creatinine increase.

The most frequent AEs (occurring in ≥15% of patients) of any attribution among 65 patients with aggressive lymphoma were petechiae/purpura/contusion (25%), diarrhea (23%), constipation (22%), fatigue (18%), upper respiratory tract infection (18%), anemia (17%), cough (15%), pyrexia (15%), and thrombocytopenia (15%). The most frequently reported grade 3 or greater AEs (occurring in ≥5% of patients) of any attribution were anemia (11%), neutropenia (9%), thrombocytopenia (9%), and pneumonia (6%). SAEs were reported in 26 patients (40%). Of those, three patients had SAEs that were considered possibly related to zanubrutinib, including one case each of peripheral edema and joint effusion (occurring in the same patient), pneumonia, and pneumonitis.

At the time of data cutoff, 26 patients with indolent lymphoma, including 17 patients with FL and nine patients with MZL, were evaluable for efficacy. In patients with FL, the ORR was 41%, with CRs in 18% and PRs in 24% of patients. SD was observed in 41% of patients. Progressive disease, or PD, was observed in one patient. In patients with MZL, the ORR was 78%, with no CRs and PRs in 78% of patients. SD was observed in 22% of patients. No PD was observed.

Fifty-eight patients with aggressive lymphoma, including 26 patients with DLBCL and 32 patients with MCL, were evaluable for efficacy. In patients with DLBCL, the ORR was 31%, with CRs in 15% and PRs in 15% of patients. In patients with MCL, the ORR was 88%, with CRs in 25% and PRs in 63% of patients.

Combination with GAZYVA® (obinutuzumab)

We are also evaluating later stage trialszanubrutinib in combination with GAZYVA®  (obinutuzumab), an approved anti-CD20 antibody therapy, in patients with B-cell lymphoma in an Phase 1b trial in Australia, the United States, and South Korea. On December 9, 2017, we presented updated preliminary clinical data from this trial at the 59th ASH Annual Meeting in Atlanta, GA. As of the data cutoff of September 15, 2017, 45 patients with CLL/SLL and 26 patients with FL were enrolled in the trial. The preliminary Phase 1b data demonstrated that the combination was generally well-tolerated and was highly active in patients with FL and TN or R/R CLL/SLL.

At the time of data cutoff, the most common AEs were grades 1 and 2. The most common AEs in patients with CLL/SLL (occurring in ≥ 20% of patients) of any attribution were petechiae/purpura/contusion (42%), neutropenia (40%), upper respiratory tract infection (36%), fatigue (24%), thrombocytopenia (24%), diarrhea (20%), and pyrexia (20%). The most common AEs in patients with FL (occurring in ≥ 20% of patients) of any attribution were upper respiratory tract infection (38%), petechia/purpura/contusion (35%), rash (27%), and thrombocytopenia (23%). Grade 3 or 4 AEs of any attribution reported in ≥ 5% of the CLL/SLL patients included neutropenia (24%) and thrombocytopenia (7%). Grade 3 or 4 AEs of any attribution reported in ≥ 5% of the FL patients included neutropenia (12%). There were no cases of serious hemorrhage, which is ≥ grade 3 hemorrhage or central nervous system hemorrhage of any grade, atrial fibrillation, or grade 3 or above diarrhea. Only one patient with CLL/SLL discontinued treatment due to an AE, a case of squamous cell carcinoma, or SCC, in a patient who had a prior history of SCC. This was also the only patient in the study who had a fatal AE.

Forty-five patients with CLL/SLL (20 TN and 25 R/R) and 21 patients with R/R FL were evaluable for variousefficacy. In TN CLL/SLL patients, after a median follow-up of 11.4 months (6.0–17.3 months), the ORR was 95%, with CRs in 35% and PRs in 60% of patients. In R/R CLL/SLL patients, at a median follow-up time of 12.7 months (7.9–19.5 months), the ORR was 92%, with CRs in 20% and PRs in 72% of patients. In R/R FL patients, at a median follow-up time of 12.1 months (0.8–19.7 months), the ORR was 76%, with CRs in 38% and PRs in 38% of patients.

Combination with Tislelizumab

We are also evaluating zanubrutinib in combination with our investigational anti-PD1 antibody tislelizumab. The open-label, multi-center Phase 1b trial is being conducted in Australia and is currently in a dose-escalation phase to be followed by a dose-expansion phase. On December 11, 2017, we presented initial data from the ongoing Phase 1b trial at the 59th ASH Annual Meeting in Atlanta, GA. The initial dose-escalation data suggested that the combination of zanubrutinib and tislelizumab was generally well-tolerated and exhibited anti-tumor activity in patients with B-cell malignancies. As of September 15, 2017, 25 patients had been enrolled. There were 13 patients with indolent lymphoma, including CLL, FL, MZL, and WM, and 12 patients with aggressive lymphoma, including DLBCL, MCL, and transformed lymphoma. The median follow-up time was 5.1 months (0.4–14.1 months). Two cases of autoimmune hemolysis occurred in patients with WM in the dose 2 cohort, and one qualified as a dose-limiting toxicity, or DLT. These events were not associated with a positive direct antiglobulin test and resolved with immunosuppressive therapy, but resulted in the decision to exclude further enrollment of WM patients in the trial. As of the data cutoff date, this autoimmune hemolysis is the only DLT case that was observed.

Among patients with indolent lymphoma, the most common AEs (occurring in ≥ 20% of patients) of any attribution were petechiae/purpura/contusion (31%) and thrombocytopenia (23%). Grade 3 and 4 AEs of any attribution reported in at least two patients included thrombocytopenia, anemia, and hemolysis (15% each).  In addition to the two cases of autoimmune hemolysis, there was one more immune-related event, a grade 4 autoimmune encephalitis. The patient was treated with aggressive immunosuppressive therapy and gradually improved over time.

Among patients with aggressive lymphoma, the most common AEs (occurring in ≥ 20% of patients) of any attribution were diarrhea, fatigue, pyrexia, upper respiratory tract infection (33% each), cough (25%), and nausea (25%). Grade 3 and 4 AEs of any attribution reported in at least two patients included pyrexia (17%). There was one patient with multiple occurrences of grade 2 and 3 pneumonitis. 

At the time of data cutoff, the efficacy-evaluable population consisted of 25 patients. Objective responses were observed in 10 patients (40%). By tumor type, two PRs were observed out of five patients with CLL, one CR and one PR were observed out of five patients with FL, one VGPR and one minor response were observed out of two patients with WM, one CR was observed out of five patients with DLBCL, and three PRs were observed out of five patients with transformed lymphoma. 

Clinical Development Plan

Based on the clinical data to date, we believe that zanubrutinib has a potentially best-in-class profile, and we are running a broad global pivotal program in multiple indications.

Globally, we have an ongoing monotherapy head-to-head Phase 3 trial versus ibrutinib in WM, which is expected to complete enrollment by the end of the third quarter of 2018; an ongoing Phase 3 trial compared to bendamustine and rituximab in patients with TN CLL/SLL; and an ongoing Phase 2 trial in combination with GAZYVA® (obinutuzumab) in patients with FL, which is a pivotal trial for accelerated or conditional approval and will require a confirmatory study. We are also planning a Phase 3 trial for head-to-head comparison versus ibrutinib in patients with R/R CLL/SLL.

In China, we received approval for Clinical Trial Applicationare conducting three separate pivotal Phase 2 trials of zanubrutinib as monotherapy in February 2016 for all phasespatients with R/R MCL, R/R CLL/SLL, and WM, respectively. We have completed enrollment in the R/R MCL and R/R CLL/SLL pivotal trials. Subject to successful completion of clinical testing. We plan to start an abbreviated dose-escalationthe trial, followed by potential single-arm registration trials in 2016 in chronic lymphocytic leukemia and mantle cell lymphoma. Because obinutuzumab is not approved in China, we plan to conductsubmit a combination trial with the CD20 antibody rituximab in chronic lymphocytic leukemia and non-Hodgkin’s lymphoma. In addition, we plan to start translational studies to take advantage of patient accessnew drug application, or NDA, in China to identify correlative biomarkersfor patients with MCL in diseases such as diffuse large B-cell lymphoma where BTK inhibitors have shown good activity in2018.

Tislelizumab (BGB-A317), a sub-population of patients.

We plan to present additional data from the dose-escalation and dose-expansion phases of our monotherapy study with BGB-3111 in 2016. We plan to present the data from our combination trials with BGB-3111 in 2016 or 2017.

BGB-A317, PD-1 Antibody

BGB-A317Tislelizumab is aan investigational humanized monoclonal antibody against the immune checkpoint receptor PD-1. We are developing BGB-A317PD-1 that is currently being evaluated in pivotal clinical trials globally and in China, and for which we plan to commence additional pivotal trials, as a monotherapy and as ain combination agent forwith standard of care to treat various solid-organsolid and blood-bornehematological cancers. Tislelizumab is designed to bind to and block downstream activity of PD-1, is a cell surface receptor that plays an important role in down-regulatingdownregulating the immune system by preventing the activation of T-cells. PD-1 inhibitors remove the blockade of immune activation by cancer cells. We believe BGB-A317Tislelizumab has high affinity and specificity for PD-1. It is differentiated from the currently approved PD-1 antibodies with the ability to bindby an engineered Fc gamma receptor I specifically engineered out, andregion, which we believe this couldmay minimize potentially resultnegative interactions with other immune cells based on preclinical data. We have a global strategic collaboration with Celgene for tislelizumab for solid tumors outside of Asia (other than Japan) as further described in improved activities. In addition, BGB-A317 has a unique binding signature to PD-1 with high affinity and superior target specificity.“—Collaboration Agreements—Celgene”.

We are evaluating BGB-A317 in the ongoing dose-escalation phase of our clinical trial in relapsed or refractory solid tumor patients and a combination trial with our PARP inhibitor, BGB-290, in Australia. As of March 25, 2016, we have dosed over 100 patients with BGB-A317 in monotherapy and combination trials. BGB-A317 is the first drug candidate produced from our immuno-oncology biologic programs, and we believe it could serve as one of the cornerstones for our immuno-oncology combination platform.

Mechanism of Action

Cells called cytotoxic T-cellsT-lymphocytes, or CTLs, provide humans an important self-defense mechanism against cancer, patrolling the body, recognizing cancer cells due to immunogenic features that differ from normal cells, and killing cancer cells by injecting poisonous proteins into them. T-cellsT-lymphocytes have various mechanisms built into them that prevent them from damaging normal cells, among which is a protein called PD-1 receptor, which is expressed on the surface of T-cells. The mostT-lymphocytes. PD-L1 is an important signaling protein that couldcan engage PD-1 is calledPD-1. PD-L1 which binds thebinding to PD-1 receptor and sends an inhibitory signal inside the T-cell, stopping it from making more poisonous proteinsT-lymphocyte and killing the cells sending the signal via PD-L1 and other cells nearby.abrogates its cytotoxic effects. Many types of cancer cells have hijacked the PD-L1 expression system that normally exists in healthy cells. By expressing PD-L1, cancer cells protect themselves from being killed by cytotoxic T-cells. BGB-A317CTLs. Tislelizumab is a monoclonal antibody designed to specifically bind to PD-1, without activating the receptor, thereby preventing PD-L1 from engaging PD-1. Therefore, we believe BGB-A317tislelizumab has the potential to restore the cytotoxic T-cell’s ability of CTLs to kill cancer cells. BGB-A317 belongs

Market Opportunity and Competition

A number of PD-1 or PD-L1 antibody drugs have been approved by the FDA. These include Merck’s  KEYTRUDA® (pembrolizumab), Bristol-Myers Squibb’s OPDIVO® (nivolumab), Roche’s TECENTRIQ® (atezolizumab), AstraZeneca’s IMFINZI® (durvalumab), and Pfizer’s BAVENCIO® (avelumab). Several PD-1 or PD-L1 antibody agents are in clinical development, such as Regeneron’s cemiplimab, Novartis’ PDR-001, Tesaro's TSR042, and Pfizer’s PF-06801591. In 2017, global sales of the PD-1 class exceeded $9 billion according to company reports, which make some of these therapies among the best-selling and fastest launches in history for oncology drugs, confirming the promise of the class.

We believe there is a large commercial opportunity in China for PD-1 or PD-L1 antibody drugs. Currently available clinical data suggest that some of the most prevalent cancers in China, such as lung, gastric, liver and esophageal cancers, are responsive to this class of agents known as immune checkpoint inhibitors which are currently the most important part of a new type of anti-cancer treatment called immuno-oncology therapy.

Market Opportunity

Forecasts of the market for monotherapy PD-1agents. In 2012, 38%, 45%, 51%, and PD-L1 antibodies have increased as new tumor types responding to these antibodies have been identified and data has accumulated regarding their potential efficacy. It is estimated that these inhibitors will reach sales of approximately $13 billion by 2023 across seven major markets (United States, France, Germany, Italy, Spain, United Kingdom and Japan).

Tumor types that have been shown to be responsive to a PD-1 antibody include several types that are common in China. These include lung, gastric and liver cancers, for which an estimated 37%, 45% and 53%49% of the worldwide annual incidence in 2012,mortalities from lung, gastric, liver, and esophageal cancers, respectively, wasoccurred in China, according to the World Health Organization. To our knowledge, BGB-A317 is the first PD-1 antibody developedCollectively, these four tumor types comprised over 1.6 million new cases in 2012 in China alone, according to enter clinical trials. Duethe World Health Organization. In addition, China has a higher proportion of PD-1 responsive tumors in its total cancer population in comparison to other geographies like the United States and the European Union, or EU. According to Chen et al. 2016, the annual incidence of the top 10 PD-1 responsive tumors in China is estimated to be 3 million out of 4.3 million in total annual cancer incidence. In comparison, the estimated annual incidence of the top 10 PD-1 responsive tumors is 0.9 million out of 1.7 million in total annual cancer incidence in the United States, and 0.8 million out of the 1.7 million total in the EU according to SEER program of the U.S. National Cancer Institute and the World Health Organization.

In China, no PD-1 or PD-L1 antibody agents have been approved. The Center for Drug Evaluation, or CDE, under the CFDA, released guidance in February 2018 on the requirements for NDA submissions of PD-1/L1 agents, specifically for data from single-arm trials on refractory / recurrent advanced cancers without standard-of-care therapies. A pre-NDA meeting is required before NDA submission, and a distinct regulatory pathwayrolling NDA submission will be accepted for PD-1/L1 therapies. Nivolumab, atezolizumab, and pembrolizumab are in late-stage development in China. Bristol-Myers Squibb submitted an NDA for nivolumab to the CFDA based on interim results from its Phase 3 CheckMate-078 trial in late

2017. Merck submitted an NDA for pembrolizumab in February 2018. Besides us, several domestic China companies also have drug candidates manufactured in China,late-stage clinical development, including Hengrui’s SHR-1210, Innovent’s IBI308, and Junshi’s JS001.

Summary of Clinical Results

As of February 2, 2018, we believe that BGB-A317 will become an important participanthave enrolled approximately 1,000 patients and healthy adults in China’s PD-1 antibody and immuno-oncology market.

Current Therapies and Limitations

Clinicalclinical trials of severaltislelizumab, including combination trials. Preliminary data from our monotherapy PD-1Phase 1 trials suggested that tislelizumab was generally well-tolerated and PD-L1 inhibitory antibodies have shown a signal of efficacyexhibited anti-tumor activity in a wide spectrumvariety of cancers,tumor types.

A multi-center, open-label Phase 1 trial of tislelizumab as monotherapy in advanced solid tumors is being conducted in Australia, New Zealand, the United States, Taiwan, and South Korea and consists of dose escalation, schedule-expansion, fixed-dose expansion, and indication expansion in disease-specific cohorts. From 2017 to date, we have presented preliminary data from multiple disease-specific subgroups in the ongoing Phase 1 trial of tislelizumab in advanced solid tumors, including melanoma, lungpatients with hepatocellular carcinoma, or HCC, gastric cancer, kidneyor GC, esophageal cancer, or EC, head and neck cancer, bladder cancer, gastric cancer,squamous cell carcinoma, or HNSCC, ovarian cancer, Hodgkin’s lymphoma, diffuse large B-cell lymphoma, follicular lymphoma,or OC, and urothelial cancer, or UC.

Hepatocellular (Liver) Cancer

The data presented on HCC are from 40 patients treated with tislelizumab at a subtypedose of breast cancer known as triple-negative breast cancer, and5 mg/kg every three weeks, or Q3W. The majority of the enrolled patients (34/40 patients) had a subtypehepatitis B virus infection. At the time of colorectal and other cancers having mismatch repair deficiency. Two such PD-1 monotherapy antibodies, nivolumab and pembrolizumab, have beenthe data cutoff on April 28, 2017, the median treatment duration was 64 days (range of 1 to 471 days).

approvedAEs assessed by the FDA for treating certaininvestigator to be treatment-related occurred in 21 patients with metastatic melanoma, non-small cell lung cancer(53%). Of those, rash (20%), pruritus (13%), increased aspartate aminotransferase, or AST (8%), fatigue (5%), hypothyroidism (5%), and decreased appetite (5%) were reported in more than one patient. All of the case of nivolumab, renal cell carcinoma.

Monotherapy PD-1 and PD-L1 antibodies have demonstrated objective responses against these tumors that can be rapid and in most cases durable. In addition, these agents can be effective against large tumors. In some tumors, including squamous and non-squamous non-small cell lung cancer, renal cell carcinoma and melanoma, randomized Phase 3 trials conducted by third parties have demonstrated superior overall survival of PD-1 antibodies compared to standard care including chemotherapy. Although some distinct toxicities associated with PD-1 and PD-L1 antibodies, overall, they have been remarkably well-tolerated.

Objective responses to monotherapy PD-1 antibodies have only been seen in a minority of patients in nearly all tumor types testedtreatment-related AEs were grades 1 or 2, with the exception of a small populationone grade 5 event of blood canceracute hepatitis assessed by the investigator to be related to tislelizumab. This patient had widely metastatic disease and died five weeks after receiving his first and only dose of tislelizumab and subsequently developing evidence of disease progression.

At the time of the data cutoff, the efficacy evaluation was early, and 27 patients were evaluable for response, defined as having measurable disease at baseline and at least one post-baseline tumor assessment, or progression or death. Twelve of the evaluable patients remained on treatment and the majority (seven) of these had only one tumor assessment at the time of the data cutoff. Confirmed and unconfirmed PRs were observed in three patients, all with hepatitis-B-positive HCC. One PR was confirmed before the cutoff date, one was confirmed one day following the cutoff date, and one was unconfirmed and the patient remained on therapy. Nine patients achieved SD, some of whom also had significant reductions in alpha-fetoprotein levels.

Gastric and Esophageal Cancers

The data presented on GC and EC were from 83 patients, 46 with advanced or metastatic GC and 37 with EC, treated with tislelizumab at 2 mg/kg or 5 mg/kg every two weeks, or Q2W, or Q3W. At the time of the data cutoff on June 8, 2017, median treatment duration was 45 days (range 4–457 days) for patients with Hodgkin’s lymphomaGC and a selected subpopulation of solid tumor50 days (range 1–246 days) for patients with mismatch repair deficiency. Combination therapyEC.

AEs assessed by the investigator to be treatment-related occurred in 15 patients with GC (33%). Of those, abdominal pain (9%), decreased appetite (9%), fatigue (7%), nausea (7%), and pruritus (4%) were reported in more than one patient, and all of these cases were grades 1 or 2. AEs assessed to be treatment-related occurred in 15 patients with EC (41%). Of those, fatigue (16%), nausea (8%), decreased appetite (5%), infusion-related reaction (5%), and myalgia (5%) occurred in more than one patient, and all of these cases were grades 1 or 2. Only one patient in each cohort reported a treatment-related AE of grade 3 or higher: grade 3 proteinuria in one patient with GC and grade 3 dermatitis in one patient with EC. SAEs considered treatment-related included one case of diarrhea and one case of pyrexia, each occurring in patients with GC. Eight patients (two with GC, six with EC) had a treatment-emergent AE with a PD-1 or PD-L1 antibodyfatal outcome; none of which were assessed as a backbone is being explored with a wide variety of agents by the industry and clinical investigators.treatment-related.

Potential Advantages of BGB-A317

We believe that having BGB-A317 in addition to our multiple clinical-stage drug candidates puts us in a strong competitive position. Based on our preclinical data, we believe a strong rationale exists for combining BGB-A317 with our drug candidates BGB-3111, BGB-283 and BGB-290. In addition, we are developing several immuno-oncology candidates that we intend to combine with BGB-A317.

We believe BGB-A317 is differentiated from the currently approved PD-1 antibodies with the ability to bind FcγRI, specifically engineered out, and we believe this could potentially result in improved activities. In addition, BGB-A317 has a unique binding signature to PD-1 with high affinity and superior target specificity. In preclinical studies, BGB-A317 showed better cellular functional activities in blocking PD-1 mediated reverse signal transduction and in activating human T-cells and primary PBMCs.

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The efficacy-evaluable population included 34 GC patients and 31 EC patients. Despite the short median follow-up time, four achieved confirmed PRs and three achieved SD among GC patients. Among EC patients, two achieved a confirmed PR and nine achieved SD. Three of the nine patients with EC who achieved SD also achieved an unconfirmed PR, including one who awaits response confirmation. At the time of the data cutoff, 27 patients remained on treatment.

Head and Neck Squamous Cell Cancer

The HNSCC data presented were from 18 patients treated with tislelizumab at 5 mg/kg Q3W. At the time of the data cutoff on June 8, 2017, median treatment duration was 104 days (range 30–339 days).

AEs assessed by the investigator to be treatment-related occurred in seven patients (39%). Of those, only fatigue (11%, all grade 1 or 2) was reported in more than one patient. One case of grade 3 nausea was the only treatment-related AE of grade 3 or higher in severity. No patient discontinued treatment due to a treatment-related AE, and of the nine deaths reported, none were considered to be treatment-related.

The efficacy-evaluable population included 17 HNSCC patients. Despite short median follow-up time, three achieved a confirmed PR and six achieved SD. At the time of the data cutoff, three patients remained on treatment.

Ovarian Cancer

The OC dataset included 51 patients treated with tislelizumab at different dose levels (0.5 to 10 mg/kg Q2W in dose escalation, 2 or 5 mg/kg Q2W or Q3W or 200 mg Q3W in dose expansion, or 5 mg/kg Q3W in indication expansion). At the time of the data cutoff on June 8, 2017, median treatment duration was 71 days (range 29–540 days).

AEs assessed by the investigator to be treatment-related occurred in 28 patients (55%). Of those, fatigue (18%), pruritus (10%), rash (10%), diarrhea (10%), lethargy (6%), nausea (6%), abdominal pain (4%), dry eye (4%), dry skin (4%), onychoclasis (4%), and maculo-papular rash (4%) were reported in more than one patient, and all, except one case of grade 3 diarrhea, were grades 1 or 2. Two additional treatment-related AEs of grade 3 or higher included one case each of grade 3 pyrexia and stomatitis. SAEs considered to be treatment-related occurred in three patients and included one case each of pyrexia, colitis, and mucosal inflammation.

The efficacy-evaluable population included 50 OC patients. Two achieved a confirmed PR and 20 achieved SD. At the time of the data cutoff, six patients remained on treatment.

Urothelial Cancer

The UC dataset included 16 patients. Of these, 12 had one or more prior systemic anticancer treatment for metastatic disease and the remaining four had progressed after receiving platinum-based regimen in the neoadjuvant or adjuvant setting. In addition, five patients had prior radiotherapy. At the time of the data cutoff on August 28, 2017, median treatment duration was 4.3 months (range of 0.7 to differentiation18.3 months). A total of six patients remained on treatment.

AEs assessed by the investigator to be treatment-related occurred in complementarity-determining regions CDR sequences14 patients (88%). Of those, fatigue (31%), rash (19%), infusion-related reactions (13%), nausea (13%), pain in extremity (13%), and key binding epitopes on PD-1, BGB-A317 has also displayed cell biology differentiationproteinuria (13%) occurred in lackmore than one patient. All of Fc receptor binding,the treatment-related AEs were grade 1 or 2 except one case each of fatigue, hyperglycemia, and diabetes mellitus. One AE of muscle weakness, which was recently shownassociated with disease progression and occurred more than one month after the last dose of tislelizumab, had a fatal outcome. This event was considered by the investigator to havenot be treatment-related.

The efficacy-evaluable population included 15 UC patients. One patient had a confirmed CR, four achieved a confirmed PR, and three achieved SD. Nine evaluable patients had PD-L1 status determined. There was one CR, two PR and one SD among six PD-L1 high patients, and one PR among three PD-L1 low or negative effect on the activitypatients.

Combination with Pamiparib

On June 5, 2017, we presented initial data from the currently approved PD-1 antibodies, nivolumab and pembrolizumab,dose-escalation portion of the Phase 1 trial of tislelizumab in FcγRI mediated effector function. Both nivolumab and pembrolizumab bind to FcγRI, while BGB-A317 has no binding to FcγRI. A recent paper, as well ascombination with our unpublished data, show that in preclinical models FcγRI binding may compromise the activity of PD-1 antibodies.

We compared the anti-cancer activity of BGB-A317 with other PD-1 antibodies in an in vivo mouse cancer model in which the mice bearing human cancer cells A431 and PBMCs were treated with BGB-A317, nivolumab, pembrolizumab or a vehicle using the same dose regimen. The results demonstrated that BGB-A317 significantly inhibited the tumor growth, while nivolumab and pembrolizumab did not reduce tumor growth in this model.

Combination with BGB-3111

We have explored the combination activity of BGB-3111 and BGB-A317 in both solid tumor and blood tumor preclinical models. In these models, human primary tumor fragments and immune cells from the same donor were co-injected into immune-deficient mice. The mice were then treated with BGB-3111 and BGB-A317 and their tumor growth and survival were followed. In the colorectal primary tumor model, the combination of BGB-3111 and BGB-A317 significantly prolonged survival.

In addition, the combination of BGB-3111 and BGB-A317 was explored in two diffuse large B-cell lymphoma primary tumor models. In both models, BGB-3111 showed weak monotherapy activity. When used as a monotherapy BGB-A317 was only active in the PD-L1 positive tumor. However, the combination of BGB-3111 and BGB-A317 was highly active, better than either monotherapy, and induced tumor regression in both PD-L1 positive and PD-L1 negative models.

Combination with BGB-283

We tested the combination activity of BGB-283 and BGB-A317 in a mouse cancer model in which a human lung cancer cell line with KRAS mutation was engrafted, and the results showed the synergistic efficacy of BGB-283 and BGB-A317.

Summary of Clinical Trials

In June 2015, BGB-A317 entered the dose-escalation phase of our multi-center, open-label trial for safety and toxicology evaluationinvestigation PARP inhibitor, pamiparib, in patients with advanced solid tumors.tumors at the 2017 American Society for Clinical sites are activeOncology, or being establishedASCO, Annual Meeting. We presented an updated dataset on January 25, 2018 at the 2018 ASCO-SITC Clinical Immuno-Oncology Symposium. The preliminary data suggested that the combination of tislelizumab and pamiparib was generally well-tolerated and showed anti-tumor activity in Australia and New Zealand, and we intend to open at least one sitemultiple solid tumor types.

At the data cutoff of July 31, 2017, 49 patients were enrolled in the United States now that we have an IND in effect with the FDA. The Safety Monitoring Committeedose-escalation portion of the trial has cleared for testingtrial. Cohorts of six to 13 patients each of the four initialreceived treatments at five planned dose levels, (0.5,or DLs. Tislelizumab was administered at 2 5 and 10 mg/kg every two weeks), and theQ3W with pamiparib at 20, 40, or 60 mg twice daily, or BID, in DLs 1, 2, and 3, respectively. Tislelizumab was also administered at a fixed dose of 200 mg Q3W with pamiparib at 40 or 60 mg twice daily in DLs 4 and 5, mg/kg every-two-week or every-three-week dose cohorts, or schedule-expansion cohorts, are being expanded withrespectively. Duration of treatment was greater than 200 days for 10 to 20 patients, each. We have dosedand a total of 73seven patients remained on treatment as of the data cutoff date. 

Dose-limiting toxicities occurred in four patients; these included one patient with grade 2 nausea, one patient with grade 3 rash at DL 4, one patient with grade 2 nausea or vomiting and one patient with grade 4 autoimmune hepatitis at DL 5. The trial identified the recommended Phase 2 dose to be tislelizumab at 200 mg fixed dose Q3W and pamiparib at 40 mg BID.

Grade 3 or 4 non-immune AEs assessed by the investigator to be related to the treatment regimen and reported in more than one patient included anemia (12%), nausea (4%) and fatigue (4%). Immune-related AEs of any grade regardless of causality occurred in 23 patients (47%); those reported in at least two patients included elevated alanine aminotransferase, or ALT, elevated AST, hypothyroidism, auto-immune hepatitis / hepatitis, diarrhea, elevated gamma-glutamyl transferase, or GGT, hyperthyroidism, and pruritus. Grade 3 and 4 liver-related AEs regardless of causality were reported in nine patients, including five patients with hepatitis and four patients with ALT, AST, and/or GGT elevations. Together, liver-related AEs of any grade regardless of causality were observed in 13 patients; all events were manageable and reversible with corticosteroid treatment. The trial protocol was amended to increase real-time hepatic safety monitoring consistent with new European Society for Medical Oncology, or ESMO, guidance for immune-related treatment-emergent AEs.

At the data cutoff of July 31, 2017, 49 patients were evaluable for efficacy. Best responses included two confirmed CRs, five confirmed PRs, and seven unconfirmed PRs. The clinical benefit rate including CRs, PRs and durable SDs with at least 24 weeks was 31%. With longer follow-up, as of January 15, 2016 in4, 2018, among the 49 evaluable patients, best responses included two confirmed CRs, eight confirmed PRs, and four dose-escalation cohorts at 0.5, 2, 5 and 10 mg/kg dosing levels and in schedule-expansion cohorts at 2 and 5 mg/kg dosing levels, and we are rapidly enrolling new patients. To date, BGB-A317 has been well-tolerated with a favorable safety profile. One patient receiving the 5 mg/kg dose developed grade 3 immune-related colitis whichunconfirmed PRs. The clinical benefit rate was considered a dose-limiting toxicity and a drug-related serious adverse event.39%. As of January 15, 2016, investigators have reported six drug-related serious adverse events, including two casesthe July 31, 2017 cutoff, 11 patients remained on treatment, the median duration of grade 3 immune-related colitis (includingresponse was 168.5 days (range: 64-508 days), and duration of treatment was over 200 days in 10 patients.

The trial is currently planned to further evaluate the patient with dose-limiting toxicity noted above), one casecombination’s activity in expansion cohorts of grade 3 autoimmune diabetes and one case of grade 3 diabetic ketoacidosis (occurring in the same patient), one case of grade 3 hypotension, and one case of grade 2 infusion reaction. The enrolled patient population included patients with a wide range of tumor types (more than 20)ovarian, triple-negative breast, castration-resistant prostate, lung, gastric / gastro-esophageal junction, urothelial, and a majority of the patients have cancers that have not been shown to respond to PD-1 or PD-L1 antibodies. There were no patients with melanoma or lung cancer, two of the indications for which PD-1 antibodies have received approvals, and patients with renal cell carcinoma, the third approved indication for PD-1 antibodies, represented a small portion (approximately 10%) of the enrolled patients. In addition, efficacy assessment is early with a large number of patients who have not had a computerized

tomography scan. While efficacy data are preliminary, signals of BGB-A317’s activity have been observed with significant objective tumor shrinkage qualifying for unconfirmed partial responses or confirmed partial responses based on the RECIST 1.1 criteria reported by investigators for a small number of patients. We continue to enroll patients in the dose-escalation phase of the trial, including schedule-expansion cohorts at 2 and 5 mg/kg dosing levels, and we plan to potentially dose up to 200 patients in the dose-expansion phase of our clinical trial to reach proof-of-concept in tumor types known to respond to PD-1 antibodies and to explore potential differentiation in tumor types that, to date, have been insensitive or resistant to PD-1 blockade.pancreatic cancers.

Clinical Development Plan

We plan to combine BGB-A317are running a broad development program with our other drug candidates,Celgene including BGB-3111, BGB-283 and BGB-290,global pivotal trials in targeted tumors and patient populations. These targets include RAF/RAS mutated cancers such as colorectal cancers, pancreatic cancer and non-small cell lung cancer, or NSCLC, GC, EC, and HCC, which are intended to support regulatory submissions globally and in China. We have initiated Phase 3 trials to evaluate tislelizumab as a potential second-line or third-line treatment compared to docetaxel in patients with NSCLC; as a potential first line treatment compared to sorafenib in patients with HCC; and as a potential second-line treatment compared to investigator-chosen chemotherapy in patients with esophageal SCC. We and Celgene expect to commence additional pivotal trials in 2018 and 2019.

In China, we have two additional China-specific pivotal trials ongoing, in patients with R/R HL and in patients with PD-L1 positive urothelial cancer. The trial in HL has completed enrollment. Subject to successful completion of the trial, we plan to submit a NDA in China for the BGB-283 combinationpatients with HL in 2018.

Pamiparib (BGB-290), a PARP Inhibitor

Pamiparib is an investigational small molecule inhibitor of PARP1 and B-cell malignanciesPARP2 that is being evaluated as a potential monotherapy and select solid tumors for the BGB-3111 combination. On February 2, 2016, we initiated a Phase 1 clinical trial with BGB-290 in combination with BGB-A317combinations for the treatment of cancers with mutations in the BRCA gene or deficiencies in homologous recombination or mismatch repair, including ovarian, breast, prostate, colorectal, and pancreatic cancers, as well as platinum-sensitive ovarian cancer. As of March 25, 2016, over 100 patients have been dosed with BGB-A317 in monotherapy and combination trials.

We plan to focus development programs on Asia-prevalent tumors including liver, gastric, esophageal, and lung cancers.various solid tumors. We believe we have the opportunity to supplement global enrollment in high-incidence cancers in China. In addition, we believe we have opportunities for an accelerated registration path in China given the high unmet needs.

We plan to present the data from the dose-escalation phase of our clinical trial at a medical conference in 2016. We also plan to present data from the dose-expansion phase of our clinical trial and combination trials in 2016 or 2017. We plan to initiate our combination trials in 2016.

BGB-290, PARP Inhibitor

BGB-290 is a molecularly targeted, orally available, potent and highly selective inhibitor of PARP1 and PARP2. We are currently developing BGB-290 as a monotherapy and in combination with other therapies for the treatment of homologous recombination deficient cancers, which are cancers that contain abnormalities in their DNA repair mechanism making these cancers particularly sensitive to PARP inhibitors. On February 2, 2016, we initiated a trial with BGB-290 in combination with BGB-A317 for the treatment of cancers with mutations in the BRCA gene or deficiencies in homologous recombination or mismatch repair, including ovarian, breast, prostate, colorectal, and pancreatic cancers, as well as platinum-sensitive ovarian cancer. We plan to initiate combination trials with chemotherapies for the treatment of gastric cancer, small cell lung cancers, and glioblastoma. We believe BGB-290pamiparib has the potential to be differentiated from other PARP inhibitors including olaparib, the only PARP inhibitor currently approved by the FDA and the EMA, in termsbecause of its potential brain penetration, greater selectivity, strong DNA-trapping activity, and good oral bioavailabilitybioavailability. Pamiparib has demonstrated pharmacological properties such as brain penetration and brain penetration.PARP–DNA complex trapping in preclinical models.

We have completed the dose-escalation phase of our clinical trial in Australia and are initiating the dose-expansion phase of our clinical trial. We have dosed over 50 patients with BGB-290 in monotherapy and combination trials as of March 25, 2016. Initial analysis of data from this trial has shown BGB-290 to be well-tolerated. Proof-of-concept has also been established, with anti-tumor activity seen starting at the lowest tested dose and data suggestive of a wide therapeutic window.

Mechanism of Action

PARP family members PARP1 and PARP2 are involved in DNA replication and transcriptional regulation and play essential roles in cell survival in response to DNA damage. PARP1 and PARP2 are key base-excision-repair proteins that function as DNA damage sensors by binding rapidly to the site of damaged DNA and modulating a variety of proteins in DNA repair processes. Inhibition of PARPs prevents the repair of common single-strand DNA breaks which leads to formation of double-strand breaks during DNA replication. Double-strand DNA breaks in normal cells are repaired by homologous recombination, and normal cells are relatively tolerant of PARP inhibition. On the other hand, cancer cells with mutations in breast cancer susceptibility gene, or BRCA1/2 genes, which are key players in homologous recombination, are highly sensitive to PARP inhibition, ainhibition. This phenomenon is called “synthetic lethality” thatand is the foundation of the therapeutic utility of PARP inhibitors as a monotherapy for BRCA mutant cancers. In addition to hereditary BRCA1/2 mutations, the synthetic lethallethality concept has been broadened to include sporadic tumors that display a so-called

“BRCAness” profile,homologous recombination deficiency, or HRD, a gene expression profile that resembles that of a BRCA deficient tumor. BRCAnessHRD can stem from somatic mutation of BRCA1/2, epigenetic silencing of BRCA genes or genetic or epigenetic loss of function of other genes in homologous recombination DNA damage repair pathways.

Third-party clinical studies have published results demonstrating that sensitivity to platinum-based chemotherapies confers sensitivity to PARP inhibitors in OC as well. Thus, the application of PARP inhibitors is likely broader than BRCA or HRD mutations, and there is additional possibility to identify and enrich patient populations for PARP inhibition.

Another potential therapeutic utility of PARP inhibitors is rational combination therapy. PARP proteins are key factors in DNA repair pathways, in particular, base-excision-repair, which is critical for the repair of DNA lesions caused by some chemotherapeutic agents and by radiation. PARP inhibitors are knownhypothesized to potentiate cytotoxicity of DNA-alkylating agents such as platinum compounds, temozolomide and ionizing radiation and canmay be used in combination with these agents in treating various cancers.

Market Opportunity

·Glioblastoma multiforme.  This is one PARP inhibitors are also considered good potential combination partners with checkpoint inhibitors in part due to increased mutations in tumor cells as a result of the frequently occurring tumorsblockade of DNA repair by PARP inhibitors.

Market Opportunity and Competition

We believe that the market opportunity for PARP inhibitors is large and expanding in various tumor histologies, settings and patient segments. Many tumor types have been shown to be responsive to PARP inhibitors, including OC, breast cancer, prostate cancer, and GC. PARP inhibitors have demonstrated encouraging activities both in relapsed and refractory patients as well as in the central nervous system. More than 10,000maintenance setting. In the United States, each year there are approximately 22,440 new cases of OC, 252,710 new cases of breast cancer, 161,360 new cases of prostate cancer, and 28,000 new cases of GC, according to the U.S. National Cancer Institute. In China, each year there are diagnosed annuallyapproximately 52,000 new cases of OC, 272,000 new cases of breast cancer, 60,000 new cases of prostate cancer, and 680,000 new cases of GC according to Chen et al. 2016.

A number of PARP inhibitors have been approved by the FDA. These include AstraZeneca’s LYNPARZA® (olaparib), Clovis Oncology’s RUBRACA® (rucaparib), and Tesaro’s ZEJULA® (niraparib). Several PARP inhibitors are in late-stage clinical development besides pamiparib, including AbbVie’s veliparib and Pfizer’s talazoparib. In 2017, global sales of the PARP class exceeded $400 million according to company reports. In China, AstraZeneca has

submitted an NDA for olaparib. In addition, Zai Lab obtained the development and commercial rights for niraparib in China, and is currently running a Phase 1 pharmacokinetics study and a Phase 3 pivotal trial as a potential maintenance treatment after two lines of platinum therapy in patients with OC. There are also some PARP inhibitors being developed by domestic Chinese companies, including fluzoparib from Hengrui / Hansoh. 

Summary of Clinical Data

As of February 6, 2018, we have enrolled approximately 200 patients in clinical trials of pamiparib, including combination trials.

A multi-center, open-label Phase 1/2 trial of pamiparib is being conducted in Australia in patients with advanced solid tumors. On September 8, 2017, we presented preliminary clinical data from the ongoing Phase 1/2 trial of pamiparib in patients with advanced solid tumors at the ESMO 2017 Congress. As of June 1, 2017, 68 patients were enrolled in the United States. Despite aggressivetrial. The median duration of therapy for all patients was 79 days (range 1 to 926 days). At the time of the data cutoff, 20 patients remained on treatment.

A multi-center, open-label Phase 1/2 trial of pamiparib is being conducted in Australia in patients with advanced solid tumors. As of June 1, 2017, 68 patients were enrolled in the trial. The median duration of therapy for all patients was 79 days (range 1–926 days). At the time of the data cutoff, 20 patients remained on treatment.

The safety analysis suggested that pamiparib was generally well-tolerated in patients with advanced solid tumors. AEs assessed to be treatment-related occurred in 78% of patients and were all grade 3 or lower in severity. The most common treatment-related AEs (≥10% of patients) were nausea (56%), fatigue (40%), anemia (25%), vomiting (21%), diarrhea (21%), decreased appetite (15%), and neutropenia or neutrophil count decrease (12%). SAEs occurred in 46% of patients, and SAEs considered to be treatment-related and occurring in more than one patient included two cases each of nausea and anemia. Four patients discontinued treatment glioblastoma multiforme still hasdue to treatment-emergent AEs. Four patients had a dismal prognosis. The five-year survival ratetreatment-emergent AE with a fatal outcome, none were assessed as being treatment-related and all of newly diagnosedwhich were associated with disease progression.

At the time of the data cutoff, 39 patients with epithelial ovarian cancer, or EOC, or associated tumors such as fallopian tube or primary peritoneal cancers were evaluable for efficacy. Among this group, there were three confirmed CRs, 10 confirmed PRs, and 21 cases of SD. Of the 23 evaluable patients with EOC or other associated tumors known to be BRCA-mutated, there were three CRs, seven PRs, and 10 cases of SD. Complete and partial responses were observed in patients known to be platinum-resistant as well as patients with platinum-sensitive disease. 

Clinical Development Plan

In addition to the ongoing Phase 2 trial of pamiparib in combination with tislelizumab, we are currently conducting two other global combination trials: a Phase 1b/2 trial of pamiparib with radiation therapy and/or temozolomide in patients with glioblastoma multiforme, who have received standard concurrent and adjuvant temozolomide, is less than 10%. BGB-290 has shown positive combination activitya Phase 1b/2 trial of pamiparib with temozolomide in both temozolomide sensitive and resistant tumor models.

·BRCA mutant and BRCAness tumors.  Based on a recent population-based cohort of Australian ovarian cancer patients BRCA1/2 mutations are found in approximately 14% of ovarian cancer patients and approximately 17% of patients diagnosed with high-grade serous ovarian cancers. Further, in the United States, BRCA1/2 mutations are found in approximately 5–10% of breast cancers. The BRCAness profile has been observed in up to 50% of high-grade serous ovarian cancers and in 66–69% ofadvanced tumors such as OC, triple negative breast cancer, patients with the triple-negative subtype (approximately 15–20% of breast cancer cases).

·Small cell lung cancer.  Small cell lung cancer is an aggressive malignancy accounting for approximately 15–18% of all lung cancers. Approximately 31,000 patients are diagnosed annually with small cell lung cancer, prostate cancer, and GC. We plan to initiate a global Phase 3 pivotal trial in patients with GC in the United States. Although newly diagnosed patients often achieve objective responses with first-line cytotoxic treatments, such as platinum-etoposide based chemotherapy combined with early thoracic radiotherapy, early relapses are common. In addition, tumor metastasis to the brain is frequent among small cell lung cancer patients. In our preclinical human patient biopsy-derived tumor models, BGB-290 has shown superior combination activity with the standard first-line cytotoxic treatments, platinum plus etoposide.first half of 2018.

·Gastric cancer.  Gastric cancer is the fifth most common cancer worldwide, with over 40% of new cases coming from China. In China, the incidence rate for gastric cancer was 23.7 per 100,000we are conducting a Phase 2 pivotal trial in 2014, corresponding to over 300,000 new cases annually. At the time of diagnosis of gastric cancer, the rate of metastasis is close to 50%. The cornerstonepatients with gBRCA-positive OC who have received at least two prior lines of therapy is surgery with adjuvant chemotherapy or chemoradiation when applicable. However, treatment ofin advanced or metastatic gastric cancer has not recently progressed, and the median survival rate is less than one year. ATM is a serine/threonine protein kinase that plays a critical role in response to DNA damage. It regulates the signaling and the initiation of cell cycle checkpoint in response to DNA-damaging agents such as ionizing radiation. In ATM-low gastric cancer patients, who account for 13–22% of the gastric cancer patient population, a paclitaxel-plus-olaparib combination significantly prolonged patient overall survival in a Phase 2 study.

Current Therapies and Limitations

There are several PARP inhibitors that are either approved (olaparib) or are in advanced clinical development, including veliparib, rucaparib, niraparib, and talazoparib.

·Safety and tolerability.  Current PARP inhibitors have shown significant toxicities in various areas. High frequency of myelosuppression, including anemia, neutropenia, and thrombocytopenia, has been reported with several PARP inhibitors in the clinic, including talazoparib, niraparib, and olaparib. Only

rucaparib has reported a high incidence of elevation of liver enzymes associated with the drug treatment.

·Limited DNA-trapping activity.  Veliparib has reported a lower response rate in BRCA-mutated cancer patients. Veliparib’s lower response rate is believed to be related to its weak reported DNA-trapping activity, which is the ability of a compound to trap PARP proteins at damaged DNA sites and lead to enhanced cytotoxicity to the tumor cells.

·Formulation/oral availability.  Formulation for certain PARP inhibitors has proven to be challenging, potentially requiring the need for a significant number of capsules to achieve desired dosing levels. As a related issue, certain PARP inhibitors, such as olaparib, have poor bioavailability.

Potential Advantages of BGB-290

BGB-290 is a highly potent and selective PARP inhibitor with favorable drug metabolism and pharmacokinetic properties. BGB-290 has shown favorable PARP1 and PARP2 selectivity in biochemical assays and has demonstrated improved specificity compared to other PARP inhibitors, such as olaparib, in cell line proliferation screens. Enhanced selectivity could potentially translate into a better safety and tolerability profile over existing PARP inhibitors. We believe a favorable safety and tolerability profile could be particularly advantageous for the combined use of BGB-290 with immune checkpoint inhibitors or chemotherapeutic agents.

·Brain penetration.  BGB-290 has shown significant brain penetration in preclinical models. The brain/plasma ratio in mice after oral dosing of 10 mg/kg BGB-290 was approximately 18%. We believe the only other PARP inhibitor currently in development that has shown significant brain penetration is veliparib, which appears to be significantly less potent compared to other PARP inhibitors and has minimal DNA-trapping activity. BGB-290 has demonstrated strong synergistic anti-tumor effects with temozolomide in treating intracranially implanted glioblastoma multiforme, consistent with its ability to cross the blood-brain barrier. In patient-derived, small cell lung cancer xenograft models, BGB-290 significantly enhanced the anti-tumor activity of chemotherapy (etoposide plus carboplatin) during the concomitant treatment stage and kept animals in a tumor-free condition throughout their maintenance treatment. One of the major risk factors for small cell lung cancer patients is the high risk of brain metastases. Due to BGB-290’s ability to penetrate the blood-brain barrier, we believe BGB-290 could provide a clear advantage over other PARP inhibitors in treating small cell lung cancer patients.

·Greater selectivity potentially leading to improved safety and tolerability.  BGB-290 is a highly active and selective PARP1 and PARP2 inhibitor in biochemical and cellular assays. Based on the preliminary data reported by investigators in the ongoing dose-escalation phase of our clinical trial, BGB-290 appears well-tolerated, and the only drug-related adverse events that occurred in over 10% of patients are nausea, fatigue, vomiting and diarrhea.

·Strong DNA-trapping activity.  BGB-290 also demonstrates potent DNA-trapping activity. PARP inhibitors are reported to trap PARP protein at damaged DNA sites, creating more cytotoxic DNA lesions. The potency of DNA-trapping for PARP inhibitors is shown to be better correlated with tumor cell growth-inhibition than inhibition of PARP enzyme activity. BGB-290 has demonstrated potent activity across multiple assays: DNA-trapping, enzymatic and cellular inhibition of PARP and tumor cell growth inhibition.

·Good oral bioavailability and potent target inhibition.  In preclinical animal models, BGB-290 shows good oral bioavailability. BGB-290 has demonstrated bioavailability of 71–76% in animal studies. In the ongoing dose-escalation phase of our clinical trial, we observed a linear and dose-dependent pharmacokinetic profile for BGB-290 with approximately two-fold accumulation at steady state. BGB-290 induced PAR inhibition in PBMCs even at the first dose level, and sustained PAR inhibition in PBMC was expected at a steady state dose of 10 mg BID or greater.

Summary of Clinical Results

BGB-290 has completed the dose-escalation phase of our multi-center, open-label clinical trial in Australia and New Zealand. Patients with relapsed or refractory solid tumors were enrolled in seven cohorts receiving monotherapy BGB-290 in doses ranging from 2.5 mg BID to 120 mg BID. Dose-limiting toxicities were observed at 120 mg BID in two patients, one with persistent grade 2 nausea and anorexia and another one with persistent grade 2 nausea, grade 3 fatigue and peripheral neuropathy. Thus, 80 mg was determined to be the maximum tolerated dose, and additional patients were enrolled to confirm the safety of an 80 mg BID dose as a potential recommended Phase 2 dose. Preliminary safety and efficacy data suggest that BGB-290 is well-tolerated with objective responses seen in multiple ovarian cancer patients including a patient receiving the lowest dose (2.5 mg) of BGB-290.

We will continue to confirm clinical activities of BGB-290 in BRCA mutant ovarian cancer and other indications with homologous recombination deficiency in the dose-expansion trial.setting. We also plan to explore emerging indications with homologous recombination deficiency, such as prostate cancer or cancers with high frequency of brain metastasis given the potential brain penetration advantage.

On February 2, 2016, we initiatedinitiate a Phase 1 clinical trial with BGB-290 in combination with BGB-A317 for the treatment of cancers with mutations in the BRCA gene or deficiencies in homologous recombination or mismatch repair, including ovarian, breast, prostate, colorectal, and pancreatic cancers, as well as platinum-sensitive ovarian cancer. The Phase 1 multi-center, dose-escalation and dose-expansion clinical3 trial of BGB-A317pamiparib as a maintenance therapy in patients with BGB-290platinum-sensitive recurrent OC in 2018.

Lifirafenib (BGB-283), a RAF Dimer Inhibitor

Lifirafenib is the first combination study exclusively based on drug candidates from our internal portfolio. Key objectivesan investigational novel small molecule inhibitor with RAF monomer and dimer inhibition activities. Lifirafenib has shown antitumor activities in the trial include determining maximum tolerated dose, recommended Phase 2 dose, pharmacokinetics,preclinical models and preliminary anti-tumor activity of the BGB-A317in cancer patients in tumors with BRAF V600E mutations, non-V600E BRAF mutations and BGB-290 combination.KRAS/NRAS mutations. We have dosed over 50 patients with BGB-290 in monotherapy and combination trials as of March 25, 2016. We also plan to commence a combination trial with temozolomide in glioblastoma multiforme.

In China, we plan to pursue monotherapy approval in BRCA mutant ovarian cancer and breast cancer, two cancers whose unmet medical needs have not been addressed and therefore may provide accelerated development opportunity. We also plan to explore combination trials with paclitaxel in gastric cancer and platinum/etoposide in small cell lung cancers. We plan to present updated dose-escalation data in 2016 and the data from our combination trial with BGB-A317 in 2016 or 2017.

BGB-283, RAF Dimer Inhibitor

BGB-283 is a small molecule RAF inhibitor. We are currently developing BGB-283 as a monotherapy and in combination with other therapieslifirafenib for the treatment of cancers with aberrations in the mitogen-activated protein kinase, or MAPK, pathway, including BRAF gene mutations and KRAS/NRAS gene mutations where first generation BRAF inhibitors are not effective. The MAPK

pathway consists of proteins in the cell that transmit a signal from a receptor on the surface of the cell to the DNA in the nucleus of the cell. This pathway plays an essential role in regulating cell proliferation and survival. We intend to develop BGB-283 to treatbelieve that lifirafenib as monotherapy or in combination with other agents may have a potential for treating various malignancies, such as melanoma, NSCLC, and endometrial cancer.

Roche’s ZELBORAF® (vemurafenib) and Novartis’ TAFINLAR® (dabrafenib) are two of the currently approved BRAF inhibitors for treating late-stage BRAF V600E/K mutant melanoma. In addition, the combination of dabrafenib and GSK’s MEKINIST® (trametinib), an MEK inhibitor, as well vemurafenib and COTELLIC® (cobimeditinib), another MEK inhibitor, are approved in patients with BRAF V600E/K mutation-positive metastatic melanoma. We are aware of several other BRAF inhibitors in clinical development targeting BRAF V600E/K mutated cancers including colorectal cancer, non-smallmelanoma, NSCLC, hairy cell lung carcinoma, endometrial cancer, ovarian cancer, pancreatic cancerleukemia and papillary thyroid carcinoma. cancer. These BRAF inhibitors include Array Biopharma's encorafenib, currently in Phase 3 trials, and Takeda's MLN-2480 (BIIB-024) and TAK-580, Daiichi Sankyo's PLX-8394, Roche's RG-6185, Genentech’s HM95573, and Novartis’ LXH254 in Phase 1 trials.

Currently approved first-generation BRAF inhibitors, vemurafenib and dabrafenib, are only active against the BRAF monomer. BGB-283 inhibits not onlyBecause lifirafenib is designed to inhibit both the monomer but also theand dimer forms of BRAF. WeRAF, we believe BGB-283lifirafenib has the potential to be a first-in-class RAF dimer inhibitor globally.

We have completed the dose-escalation phase, and we are currently conducting the dose-expansion phase, of our clinicalinhibitor. Lifirafenib was evaluated in a multicenter, open-label Phase 1 trial conducted in Australia and New Zealand comprised of two parts — dose escalation and dose expansion — in a broad range of patient populations, includingpatients with BRAF mutated melanoma, thyroid cancer, colorectal cancer, non-small cell lung cancer and other non-BRAF mutated tumors as well asor KRAS/NRAS mutated endometrial cancer, colorectal cancer, non-small cell lung cancer and other KRAS/NRAS mutation bearing cancers, where first-generation BRAF inhibitors have not been effective. We have also initiated an abbreviated dose-escalation trial in China. We have dosed over 150solid tumors or patients in our trials in Australia, New Zealand, and China as of March 25, 2016. Initial analysis of data from these trials has shown BGB-283 to be well-tolerated with a favorable safety profile. We have achieved proof-of-concept in a range of cancers including those with KRAS and BRAF mutations. We have granted exclusive licenses for the rights to develop and commercialize BGB-283 to Merck KGaA worldwide (outside China). We are currently conducting all clinical development and will continue to do so until Merck KGaA exercises its Continuation Option as further described in the section below titled “—Collaboration with Merck KGaA.”

Mechanism of Action

The MAPK pathway is a chain of proteins that communicates a signal from a receptor on the surface of a cell to the DNA in the nucleus of the cell. The pathway includes a small G protein (RAS) and three protein kinases (RAF, MEK, and ERK). A kinase is an enzyme that catalyzes the transfer of a phosphate group from a donor molecule to an acceptor. This process often acts as an “on” or “off” switch to regulate cellular signaling. The MAPK pathway plays an essential role in regulating cell proliferation and survival. Activation of the RAS-RAF-MEK-ERK kinase cascade by external stimuli transduces signals from the plasma membrane into the cell nucleus to control gene expression and determine cell fate. Aberrant activation of the MAPK signal transduction pathway is frequently found in different types of cancers, contributing to increased cell division, suppressed apoptosis, and enhanced cell motility and invasion. In many cancers, a defect in the MAPK pathway leads to uncontrolled tumor growth. The two key components of the MAPK pathway, BRAF and RAS, are two of the most frequently mutated genes in human cancers. BRAF is one of the three kinases that belong to the RAF kinase family. There are three members: ARAF, BRAF and CRAF. BRAF is the most frequently mutated oncogene in this kinase superfamily. Mutated BRAF and RAS lead to activation of the MAPK pathway and promote tumor development and growth. Functions of BRAF in the MAPK pathway are key to cell proliferation and survival. Mutations that lead to activation of BRAF promote cell transformation and proliferation and thus positively correlate with tumor development and growth. The most frequent BRAF mutation, BRAF V600E, causes constitutive activation of the kinase as well as insensitivity to negative feedback mechanisms. The mutated BRAF signals as a monomer, independent of upstream growth stimuli. It has been found that RAF kinases can homo- and heterodimerize and form homodimer or heterodimer of RAF proteins. Dimerization has been reported to be one of the key mechanisms of resistance to first-generation BRAF inhibitors, such as vemurafenib and dabrafenib. The three most common molecular mechanisms of acquired resistance of BRAF V600E melanomas to RAF inhibitors—NRAS mutation, splicing of BRAF V600E that produce a truncated BRAF kinase, and BRAF V600E overexpression due to gene amplification—all result in dimerization of BRAF V600E. First-generation BRAF inhibitors only inhibit the BRAF V600E monomer form at physiologically meaningful concentrations. In contrast, BGB-283 has been shown to inhibit both BRAF V600E monomer and RAF dimer in BRAF inhibitor sensitive and resistant melanoma cell models, which is involved in signaling downstream from RAS. We believe this feature of BGB-283 may help to address the drug resistance issues in BRAF mutated tumors and further expand its utility into RAS mutated patient populations.

Market Opportunity

We believe BGB-283 has applicationspancreatic cancer. Lifirafenib demonstrated activity in both BRAF mutated cancers and RAS, including KRASKRAS-mutated tumors in preclinical studies and NRAS, mutated cancers. The oncogenic BRAF V600E mutation was detected in approximately 8%the dose-escalation portion of all human solid tumors, including approximately 45% of papillary thyroid cancers. Mutations in any onethis Phase 1 trial.

We presented data from the dose-expansion portion of the three RAS genes, HRAS, NRAS or KRAS, are amongtrial at the most common events in human tumorigenesis. KRAS mutations are detected prominently in colorectal cancer, non-small cell lung carcinoma and pancreatic cancer. Additionally, notable KRAS or NRAS mutation rates have been reported in melanoma, ovarian cancer, endometrial cancer, bladder cancer, biliary cancer, thyroid cancer, leukemia and multiple myeloma.2017 American Association for Cancer Research Annual Meeting. The first-generation, FDA-approved BRAF inhibitors have limited activity outside of melanoma, non-small cell lung cancer and thyroid cancers. In addition, these first-generation BRAF inhibitors do not exhibit activity against KRAS and NRAS mutations.

Current Therapies and Limitations

Small molecules that selectively target mutant BRAF have shown considerable efficacy in melanoma patients with the BRAF V600E mutation. Vemurafenib and dabrafenib are first-generation BRAF inhibitors approved by the FDA to treat late-stage BRAF V600E mutant melanoma. The limitationsdose-expansion portion of the first-generation BRAF inhibitors are listed below:

·Limited activity towards RAF dimers.  Vemurafenibtrial was designed to evaluate the safety and dabrafenib have not demonstrated significant activity outsideefficacy of melanoma, thyroid,lifirafenib at the recommended Phase 2 dose of 30 mg once daily established in the dose-escalation part of the trial. In the dose-expansion portion, lifirafenib was generally well-tolerated at a dose of 30 mg once daily and non-small cell lung cancers with BRAF V600E mutation. One potential explanation for the limited activity of these first-generation BRAF inhibitors beyond BRAF V600E mutant cancers is that they inhibit only the BRAF V600E monomer and do not inhibit the RAF dimers.

·Limited activity in KRAS/NRAS mutated cancers.  To date, first-generation BRAF inhibitors have not demonstrated activity in RAS mutated cancers. Efforts in developing RAS-directed molecular therapeutics have been limited by the difficulty in selectively targeting the RAS GTPase family of enzymes with small-molecule inhibitors. A number of mitogen/extracellular signal-regulated kinase, or MEK, inhibitors have been developed and tested clinically but have very limitedcontinued to show antitumor activity in patients with RAS mutated cancers.

·Limited activity against EGFR.  A numberBRAF V600-mutated solid tumors and patients with KRAS-mutated solid tumors. The safety analysis, which included 96 patients as of studies havethe September 12, 2016 cutoff, suggested that feedback activationlifirafenib was generally well-tolerated at 30 mg once daily, with most drug-related AEs being grades 1 or 2 in severity. The most frequent drug-related AEs (≥10%) of EGFRany grade were fatigue (38.5%), dysphonia (26.0%), decreased appetite (21.9%), palmar-plantar erythrodysaesthesia syndrome (21.9%), thrombocytopenia (19.8%), dermatitis acneiform (17.7%), diarrhea (16.7%), rash (16.7%), nausea (15.6%), hypertension (11.5%), and MAPK signaling uponglossodynia (10.4%). The most frequent drug-related grade 3 and 4 AEs (≥2%, two patients or more) included fatigue (7.3%), hypertension (6.3%), thrombocytopenia (6.3%), pyrexia (3.1%), hyponatremia (2.1%), anemia (2.1%), neutropenia (2.1%), febrile neutropenia (2.1%), decreased platelet count (2.1%), increased alanine aminotransferase (2.1%), increased GGT (2.1%), and sepsis (2.1%).

The cutoff for the efficacy analysis was September 17, 2016. In seven patients with BRAF inhibition may contributeV600-mutated melanoma (including one V600K and one V600R) who were naïve to the poor responseBRAF or MEK inhibitors, there were three PRs and three cases of colorectal cancerSD. In three patients to the first generationwith BRAF inhibitors. First generationV600-mutated PTC, there was one PR and two cases of SD. In six patients with KRAS-mutated NSCLC, there was one PR and two cases of SD. In ten patients with solid tumors with BRAF inhibitors do not have inhibitory activity against EGFR and as a resultnon-V600 mutations or solid tumors with BRAF V600 mutations that are not able to sequester the feedback activationincluded in other cohorts, there were two PRs, in one patient with BRAF V600E-mutated melanoma and one with BRAF V600E-mutated OC, and three cases of EGFR uponSD. In two patients with BRAF inhibition.

·Rapid developmentV600-mutated NSCLC, there was one unconfirmed PR and one case of resistance.  Despite the successSD. Additional cases of first-generation BRAF inhibitorsSD were observed in treating metastatic melanoma patients, they are limited by the durabilityfour of response. For example, in

previously treated metastaticsix melanoma patients with BRAF V600E mutationV600-mutated melanoma who were treatedhad responses to but developed resistance against BRAF or MEK inhibitors, nine of 13 patients with vemurafenib, approximately 52%BRAF V600-mutated CRC, five of five patients with KRAS-mutated endometrial cancer, 12 of 20 patients with KRAS/NRAS-mutated CRC, and 10 of 21 patients with other KRAS/NRAS-mutated solid tumors or pancreatic cancer. In the Phase 1a portion of the patients hadtrial, confirmed objective responses included a complete response in a patient with BRAF V600E-mutated melanoma and two PRs, one in a patient with BRAF V600E-mutated thyroid cancer and one in a patient with KRAS-mutated endometrial cancer.

BGB-A333, a PD-L1 Inhibitor

BGB-A333 is an objective response, correspondinginvestigational humanized IgG1-variant monoclonal antibody against PD-L1, the ligand of PD-1. We intend to significant tumor shrinkage but the median duration of response was only 6.5 months. Only rarely do tumors regress completely in the clinic, and for most patients the therapeutic effects are temporarydevelop BGB-A333 either as resistance to the therapies develops. Studies have shown that the majority of these resistance cases are caused by increased RAF dimer formation in response to treatment with first-generation BRAF inhibitors, resulting in the restoration of extracellular signal-regulated kinase, or ERK, signaling and insensitivity to drug treatment.

Potential Advantages of BGB-283

BGB-283 is a novel inhibitor of RAF, in both monomeric and dimeric forms. BGB-283 has demonstrated potent and reversible inhibitory activities against RAF family kinases, including wild-type ARAF, BRAF, CRAF and BRAF V600E, in biochemical assays. In addition, BGB-283 has shown potent inhibitory activity against EGFR in biochemical assays using EGFR kinases, cancer cell lines, and xenograft models. In BRAF wild-type cells that harbor the KRAS mutations, treatment with BGB-283 resulted in much reduced up-regulation of pERK, a phosphorylated form of ERK, compared with vemurafenib in cancer cell models.

In preclinical testing, BGB-283 also retained inhibitory activity in vemurafenib-resistant BRAF splicing isoform p61-BRAF V600E. Data generated in preclinical studies using biochemical, cell-based and animal studies suggest that BGB-283 could offer significant patient benefit in inhibiting tumors with aberrations in the RAF MAPK/ERK pathway, including BRAF mutations and KRAS/NRAS mutations as either monotherapy or in combination with other cancer therapies.

We believe BGB-283 has the potentialtherapies, such as tislelizumab, to be differentiated fromtreat various cancers and potentially other drug candidatesindications. BGB-A333 is currently under development and from approved first-generation BRAF inhibitors due to the following:

·Increased inhibitory activity against RAF dimers.  BGB-283’s increased inhibitory activity against RAF dimers may potentially address resistances associated with increased RAF dimer formation in response to treatment with first-generation BRAF inhibitors. As noted above, most known molecular mechanisms of resistance to RAF inhibitors induce RAF dimerization. As such, BGB-283’s ability to inhibit RAF dimers and target disregulated MAPK pathways resistant to first-generation BRAF inhibitors could resultbeing evaluated in a clinically significant effect.

·Increased activity in KRAS/NRAS mutated cancers.  We believe that BGB-283’s RAF dimer activity could translate into anti-tumor activity in KRAS/NRAS mutated cancers. Anti-tumor activities were observed in preclinical KRAS/NRAS mutant cancer models in vivo.

·Increased inhibitory activity against EGFR.  BGB-283 has demonstrated inhibitory activity against EGFR. The reported response rate of vemurafenib in BRAF V600E colorectal cancer is only 5%. Two independent studies suggested that EGFR feedback activation could be one of the main mechanisms of the observed resistance to first-generation BRAF inhibitors. BGB-283 has demonstrated good EGFR inhibitory activity in both in vitro and in vivo preclinical models. BGB-283’s activity against EGFR may help address the EGFR feedback activation observed in BRAF V600E colorectal cancer tumors.

·Differentiated resistance profile.  BGB-283 has shown inhibitory activity against RAF dimers. An increase in RAF dimers has been observed to be a major resistance mechanism to first-generation BRAF inhibitors. A differentiated resistance profile has been observed in preclinical models for BGB-283.

Summary of Clinical Results

The dose-escalation phase of our multi-center, open-labelPhase 1 clinical trial in Australia and New Zealand was completed in June 2015. This trial was designed to assesstest the safety tolerability and pharmacokinetic propertiesanti-tumor effect of BGB-283 as a monotherapy. Relapsed or refractory solid tumorBGB-A333 alone and in combination with tislelizumab in patients with BRAFadvanced solid tumors.

Sitravatinib (MGCD-0516), a Multi-Kinase Inhibitor

In January 2018, we entered into an exclusive license agreement with Mirati Therapeutics, Inc., or KRAS/NRAS mutations were enrolledMirati, for the development, manufacturing and commercialization of Mirati’s sitravatinib in the trial in seven dose cohorts across five sites inAsia (excluding Japan and certain other countries), Australia, and New Zealand. Sitravatinib is an investigational spectrum-selective kinase inhibitor which potently inhibits receptor tyrosine kinases, including RET, TAM family receptors (TYRO3, Axl, MER), and split family receptors (VEGFR2, KIT). Sitravatinib is being evaluated by Mirati as a single agent in a dose-expansion trial in patients whose tumors harbor specific genetic alterations in NSCLC and other tumor types. Sitravatinib has shown encouraging interim results in an ongoing Phase 2 trial in combination with nivolumab in NSCLC patients who have progressed after prior treatment with a checkpoint inhibitor. We plan to investigate sitravatinib in combination with tislelizumab in China and the licensed territory.

BGB-283 showed a dose-dependent pharmacokinetic profile,Under the license agreement, Mirati retains exclusive rights for the development, manufacturing and plasma concentrationscommercialization of BGB-283 increased proportionallysitravatinib outside of the licensed territory. We made an upfront cash payment of $10 million to Mirati and agreed to pay up to $123 million based upon the achievement of certain development, regulatory and sales milestones, as well as royalties at tiered percentage rates ranging from 5 mg through 50 mg. The mean half-lifemid-single digits to twenty percent on annual net sales of BGB-283 was approximately 110 hours. The dose-limiting toxicity of BGB-283sitravatinib in the dose-escalation phaselicensed territory, subject to reduction under specified circumstances.

CC-122, a Cereblon Modulator

CC-122 is an investigational next-generation Cereblon modulator currently in clinical development by Celgene. It is in multiple Phase 1 and Phase 1/2 clinical trials, both as a single agent and in combination, for hematological and solid tumor cancers outside of our clinical trial conductedChina. CC-122 has been differentiated from previous compounds (such as thalidomide, lenalidomide and pomalidomide) and has been developed based on the scientific understanding of Cereblon-mediated protein homeostasis.

In August 2017, we entered into a license and supply agreement with Celgene, pursuant to which we were granted a license to develop and commercialize CC-122 in Australia and New ZealandChina. See “—Collaboration Agreements—Celgene.”

Our Commercial Products

We commercialize the following cancer drugs in China under an exclusive license from Celgene.

ABRAXANE®

ABRAXANE®  (paclitaxel albumin-bound particles for injectable suspension) is a solvent-free chemotherapy product which was thrombocytopenia. Based on preliminary safety data, most of the reported drug-related adverse events have been mild or moderate,developed using Celgene’s proprietary nab® technology platform. This protein-bound chemotherapy agent combines paclitaxel with thrombocytopenia being the most frequent severe adverse event, reportedalbumin. Globally, ABRAXANE® is approved for uses in approximately 10% of the patients. As of January 15, 2016, severe adverse events that were considered to be drug-related included fever, fatigue, dehydration, thrombocytopenia, Drug Reaction with Eosinophila and Systemic Symptoms syndrome, sepsis, hyponatraema, febrile neutropenia, and constipation. Other drug-related adverse events included rash, hand-foot syndrome, and anorexia. Cutaneous malignancies such as squamous cell carcinomas, which have been observed with the approved first-generation BRAF inhibitors, have not been observed in patients treated with BGB-283. Initial anti-tumor activities of BGB-283 were observed in patients with both BRAF-mutated and KRAS-mutated patients.

labeling. In China, weABRAXANE® is approved for metastatic breast cancer after failure of combination chemotherapy for metastatic disease or relapse within six months of adjuvant chemotherapy. Prior therapy should have obtained approval of our Clinical Trial Application for BGB-283. We have initiated the dose-escalation phase of our clinical trial in China. Among the 24 patients treated in China as of January 15,included an anthracycline unless clinically contraindicated.

According to Chen et al. 2016, there were approximately 4.3 million new cancer cases and 2.8 million cancer deaths in China in 2015, with breast cancer as the most common tumor type in Chinese women. It is estimated that in 2015 breast cancer affected 268,600 women and resulted in 69,500 deaths. Targeted therapy, hormone therapy and chemotherapy are three treatment-related serious adverse effects, includingmain strategies to treat different types of breast cancer.

Taxane is the backbone chemotherapy to treat triple negative breast cancer, Her2+ or aggressive estrogen-receptor-positive and/or progesterone-receptor-positive breast cancer patients. ABRAXANE® is the only currently approved taxane that does not need pre-medication of dexamethasone to prevent hypersensitivity reactions, and several Phase 3 trials have demonstrated its efficacy and safety compared to solvent-based taxanes in both metastatic breast cancer and neo-adjuvant settings. Unlike other taxanes, ABRAXANE® has demonstrated unique and strong efficacy in pancreatic cancer and has become the backbone of first line standard of care for metastatic pancreatic cancer globally.

The taxanes marketed in China include two branded solvent-based paclitaxel (TAXOL® and ANZATAX), one casebranded docetaxel (TAXOTERE®), one lipsome-paclitaxel (LIPUSU), one albumin-bound paclitaxel (ABRAXANE®) and dozens of grade 3 and two casesgeneric taxanes. LIPUSU is currently the market leader with approximately one-third of grade 4 thrombocytopenia. Because the number of enrolled melanoma patients reached the targeted accrual range, and there have been more frequent observations of grade 3/4 thrombocytopeniavalue share. 

In 2017, ABRAXANE® held an estimated 5.4% value share in the taxane market in China. In February 2018, a generic albumin-bound paclitaxel from CSPC Pharmaceutical Group was approved by the CFDA. Another generic form of albumin-bound paclitaxel from Hengrui is under review by the CFDA. 

In 2018, we plan to seek to differentiate and defend ABRAXANE® against generic competition in China, trial (reportedexpand our sales force footprint and hospital coverage, and improve patient access through critical illness insurance negotiations and provincial reimbursement listings. 

REVLIMID®

REVLIMID®  (lenalidomide) is an oral immunomodulatory drug that was approved by the CFDA in sevenChina in 2013 for the treatment of multiple myeloma, or MM, in combination with dexamethasone in adult patients who have received at least one prior therapy. On February 2, 2018, REVLIMID® received CFDA approval of a new indication for the treatment of MM in combination with dexamethasone in adult patients with previously untreated MM who are not eligible for transplant. Chinese guidelines recommend lenalidomide as a standard of care for the treatment of R/R and newly diagnosed MM as well as in the maintenance setting. 

MM is a malignant plasma cell disease whose tumor cells originate in plasma cells in the bone marrow, which are cells in which B-lymphocytes develop to the final functional phase. The current World Health Organization classifies it as a B-cell lymphoma, also known as plasma cell myeloma / plasmacytoma. MM is characterized by abnormal proliferation of bone marrow plasma cells accompanied by overproduction of monoclonal immunoglobulin, or M protein. MM is often accompanied by multiple osteolytic lesions, hypercalcemia, anemia, and kidney damage. Due to the inhibition of normal immunoglobulin production, patients are prone to a variety of bacterial infections.

At present, MM is one of the most common malignant tumors in the blood system and occurs frequently in the elderly. The actual incidence increases with age, peaking from 60 to 70 years of age. Men suffer slightly more than women. Globally, the incidence was estimated at 2 to 3 per 100,000, with a male-to-female ratio of 1.6:1, and most patients are over 40 years old, according to Siegel et al., 2011 and IMS analysis. It is estimated that the incidence rate of MM is approximately 1-2 per 100,000 people in China, or approximately 18,000 new patients in 2017, out of 24which 10,000 are in urban populations, according to Lu et al., 2014, IMS analysis, and local market research. With a growing aging population and improving diagnosis, China has seen a steady increase in MM incidence.

Although MM cannot be cured, the progression of the disease can be controlled. The purpose of treatment is to extend patients’ survival and improve quality of life. The main treatments for MM in China include VELCADE®, which is a proteasome inhibitor marketed by Johnson and Johnson in China since 2006, generic thalidomide and REVLIMID®. VELCADE® currently dominates the market in first-line MM treatment in China, while VELCADE® and REVLIMID® share the market in thesecond line. The first lenalidomide generic and first bortezomib generic in China were approved in November 2017. Another new agent for R/R MM, ixazomib, an oral proteasome inhibitor developed by Takeda, is currently under regulatory review in China.

In 2017, the patient share for REVLIMID® in second-line MM in the top 30 hospitals in China rose from an estimated 36% to 47%. REVLIMID® achieved national reimbursement drug listing, or NRDL, through a successful price negotiation with the Ministry of Human Resources and Social Security in June 2017. 

VIDAZA®

VIDAZA® (azacitidine for injection)is a pyrimidine nucleoside analog that has been shown to reverse the effects of DNA hypermethylation and promote subsequent gene re-expression. VIDAZA was approved in China in April 2017 for the treatment of intermediate-2 and high-risk myelodysplastic syndromes, or MDS, chronic myelomonocyte leukemia, or CMML, and acute myeloid leukemia, or AML, with 20% to 30% blasts and multi-lineage dysplasia. In January 2018, VIDAZA®, became commercially available in China.

MDS are a group of cancers in which immature blood cells in the bone marrow do not mature and therefore do not become healthy blood cells. Approximately seven per 100,000 people are affected with approximately four per 100,000 people newly acquiring the condition each year globally according to Germing et al., 2013. The typical age of onset is 70 years. The higher-risk MDS (intermediate-2 and high-risk MDS) is fatal because the median overall survival rate is only 0.4-1.1 years and nearly 30% of these patients including three cases reported as of January 15, 2016 as serious adverse events) comparedprogress to AML,according to the Australia / New Zealand trial (reportedU.S. National Comprehensive Cancer network, or NCCN, MDS guideline 2013 and MDS Foundation. DNA methylation is an important mechanism of epigenetic gene regulation, but aberrant DNA hypermethylation can result in eight outgene silencing. Silencing of 105 patients)tumor suppressor genes promotes cancer development and progression. MDS patients display aberrant DNA methylation of thousands of genes, which increases with advanced disease and is a poor prognostic factor.

In China, the main treatments for intermediate-2 and high-risk MDS are conventional care regimen, or CCR (best supportive care, low-dose cytarabine and intensive chemotherapy), we voluntarily decidedand hypomethylating agents, or HMAs. DACOGEN® (decitabine) marketed by Johnson and Johnson was the first HMA agent approved in China in 2009. In the past several years, at least six decitabine generics have become available. In 2017, decitabine was listed in the NRDL. Nevertheless, there are still over 50% of higher-risk MDS patients treated by CCR and the unmet need remains large.

VIDAZA® is the only approved HMA shown to temporarily suspend new patient accrualprolong survival for patients with MDS. Besides reversing the effects of DNA hypermethylation, VIDAZA® inhibits protein synthesis via RNA incorporation. VIDAZA® is a Category 1 recommended treatment for patients with intermediate-2 and high-risk MDS, according to this trialthe U.S. NCCN guideline. It is also a first-line recommended treatment for patients with intermediate-2 and high-risk MDS, according to allow evaluation of pharmacokinetics, safety and efficacy while dosing in already-enrolled patients continues. In total, over 150 patients have been treated with BGB-283 in Australia, New Zealand, and China as of March 25, 2016.

Preclinical Assetsthe Chinese MDS treatment guidelines.

Our preclinical pipelinePreclinical Programs

We have a proprietary cancer biology platform that has also allowed us to develop our clinical-stage drug candidates and several additional preclinical-stage drug candidates in potentially important areas. These currently consistsconsist of targeted therapies and immuno-oncology agents, including a PD-L1 monoclonal antibody, an additional RAF dimer inhibitor, a TIM-3 cell surface protein monoclonal antibody, and a BTK inhibitor for non-oncology indications. We anticipate advancing one or more of our preclinical assets into the clinic in the next 1812 months. We believe we have the opportunity to combine our PD-1 monoclonal antibodytislelizumab with other clinical-stage

General Electric for the purchase of its state-of-the-art KuBio™ prefabricated biomanufacturing equipment and commenced construction in 2017. We expect the first phase of the facility to be completed and operational in 2019.

We also have an approximately 140 square meter manufacturing facility at our research and development facilities in Beijing, China, which produces preclinical and clinical trial materials for some of our small molecule drug candidates.

We outsource to a limited number of external contract manufacturers the production of some drug substances and drug products, and we expect to continue to do so to meet the preclinical, clinical, and potential commercial requirements of our drugs and drug candidates. We have framework agreements with most of our external service providers, under which they generally provide services to us on a short-term and project-by-project basis. For example, we have an agreement with a contract manufacturer for clinical supply of zanubrutinib and expect to enter into a commercial supply agreement for zanubrutinib in the future. In addition, in January 2018, we entered into a commercial supply agreement with Boehringer Ingelheim Biopharmaceuticals (China) Ltd., or Boehringer Ingelheim, for our investigational anti-PD-1 antibody therapy, tislelizumab, which will be manufactured at Boehringer Ingelheim’s facility in Shanghai, China as part of a marketing authorization holder, or MAH, trial project pioneered by us and Boehringer Ingelheim. Under the terms of the commercial supply agreement, Boehringer Ingelheim will manufacture tislelizumab in China under an exclusive multi-year arrangement, with contract extension possible. In addition, we also obtained certain preferred rights for future capacity expansion by Boehringer Ingelheim in China. For our commercial products licensed from Celgene, we rely on Celgene and its contract manufacturers outside of China for the supply of these drugs.

Currently, we obtain raw materials for our manufacturing activities from multiple suppliers who we believe have sufficient capacity to meet our demands. In addition, we believe that adequate alternative sources for such supplies exist. However, a risk exists that an interruption supplies would materially harm our business. We typically order raw materials and services on a purchase order basis and do not enter into long-term dedicated capacity or minimum supply arrangements.

Manufacturing is subject to extensive regulations that impose various procedural and documentation requirements governing recordkeeping, manufacturing processes and controls, personnel, quality control and quality assurance, among others. Our manufacturing facilities and the contract manufacturing organizations we use to manufacture our drugs and drug candidates operate under current good manufacturing practices, or cGMP, conditions. cGMP are regulatory requirements for the production of pharmaceuticals that will be used in humans.

Collaboration Agreements

Celgene Corporation

Exclusive License and Collaboration Agreement

On July 5, 2017, we entered into an Exclusive License and Collaboration Agreement with Celgene and its wholly-owned subsidiary, Celgene Switzerland LLC, or Celgene Switzerland, which became effective on August 31, 2017, pursuant to which we granted the Celgene parties an 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, which we refer to as the PD-1 License Agreement.

Pursuant to the terms of the PD-1 License Agreement, the Celgene parties made upfront payments of $263 million to us. We may also receive up to $980 million in potential development, regulatory and sales milestone payments and tiered royalties based on percentages of annual net sales, depending on specified terms, in the low double digit to mid twenties, with customary reductions in specified circumstances. Royalties are payable on a licensed product-by-product and country-by-country basis until the latest of the expiration of the last valid patent claim, the expiration of regulatory exclusivity, or 12 years after the first commercial sale of such licensed product in the country of sale.

Each party has the right to develop and commercialize tislelizumab in its respective field and territory, and has also agreed to collaborate through a joint steering committee comprised of an equal number of representatives from each party on, among other things, the conduct of up to eight global pivotal clinical trials, or the Basket Studies. Each Basket

Study will be conducted and funded by either us or Celgene in accordance with a mutually agreed development plan and study design. For any Basket Studies conducted and funded by us, Celgene has the right to opt into such program, at which time it will reimburse us for agreed upon development costs based on a multiple of such costs that varies according to the stage of development at which Celgene opts into the program. Celgene has committed to use commercially reasonable efforts to develop at least one licensed product, to seek specified regulatory approvals and to spend at least $100 million on development for the Basket Studies led by Celgene, subject to specified conditions. In addition, we retain the right to develop tislelizumab in combination therapies with our pipeline portfolio compounds, and Celgene has a right of first negotiation for tislelizumab in the hematology field and in our territory, subject to targetspecified conditions.

The PD-1 License Agreement contains customary representations, warranties and covenants by us and Celgene. Unless earlier terminated, the agreement will expire on a licensed product-by-product and country-by-country basis upon the expiration of the royalty term in such country for such licensed product. The agreement may be terminated by Celgene upon 30 days’ prior written notice, or by either party upon the other party’s bankruptcy or uncured material breach.

Celgene China Agreements

On July 5, 2017, we and a wholly-owned subsidiary of Celgene, Celgene Logistics Sàrl, or Celgene Logistics, entered into a License and Supply Agreement, which we refer to as the China License Agreement and which became effective on August 31, 2017, pursuant to which we were granted the right to exclusively distribute and promote Celgene’s approved cancer immunity cycletherapies, ABRAXANE®, REVLIMID®, and VIDAZA®, and its investigational agent CC-122 in clinical development in China, excluding Hong Kong, Macau and Taiwan. In addition, if Celgene decides to commercialize a new oncology product through a third-party in the licensed territory during the first five years of the term, we have a right of first negotiation to obtain the right to commercialize the product, subject to certain conditions.

The term of the China License Agreement is 10 years and may be terminated by either party upon written notice in the event of uncured material breach or bankruptcy of the other party, or if the underlying regulatory approvals for the covered products are revoked. Celgene Logistics also has the right to terminate the agreement with respect to REVLIMID® at any time upon written notice to the Company.

The China License Agreement contains customary representations and warranties and confidentiality and mutual indemnification provisions.

On August 31, 2017, our wholly owned subsidiary, BeiGene (Hong Kong) Co., Ltd., acquired 100% of the equity interests of Celgene Pharmaceutical (Shanghai) Co., Ltd., or Celgene Shanghai, a wholly-owned subsidiary of Celgene Holdings East Corporation established under the laws of China. This company, which we subsequently renamed BeiGene Pharmaceutical (Shanghai) Co., Ltd., is in the business of, among other things, providing marketing and promotional services for the pharmaceutical products that we license from Celgene. Prior to closing, Celgene separated out certain business functions, including regulatory and drug safety, that continue to support the business acquired by us.

Merck KGaA, Darmstadt Germany

Pamiparib

On October 28, 2013, we entered into license agreements with Merck KGaA, Darmstadt Germany, which we refer to respectively as the Ex-PRC PARP Agreement and the PRC PARP Agreement, pursuant to which (a) we granted to Merck KGaA, Darmstadt Germany an exclusive license under certain of our intellectual property rights to develop and manufacture, and, if Merck KGaA, Darmstadt Germany exercised a continuation option, to commercialize and manufacture pamiparib and any other compound covered by the same existing patent rights with primary activity to inhibit PARP 1, 2 or 3 enzymes, or the Licensed PARP Inhibitors, in the Ex-PRC Territory, and (b) Merck KGaA, Darmstadt Germany granted us an exclusive license under certain of its intellectual property rights to develop, manufacture and commercialize the Licensed PARP Inhibitors in the People’s Republic of China, or the PRC, which we refer to as the PRC Territory.

On October 1, 2015, pursuant to a purchase of rights agreement, we repurchased all of Merck KGaA, Darmstadt Germany's rights under the Ex-PRC PARP Agreement, in consideration for, among other things, a one-time payment of $10 million and reduction of future milestone payments we were eligible for under the PRC PARP Agreement. In connection with that repurchase, we also agreed to provide Merck KGaA, Darmstadt Germany with global access to our clinical PARP supplies, including pamiparib, for its combination trials, during the option period. The Ex-PRC PARP Agreement was terminated, except for certain provisions that are needed to effectuate the continuation of the PRC PARP Agreement, including those provisions that were required in the event that Merck KGaA, Darmstadt Germany exercised its PRC Commercialization Option (described below).

Pursuant to the PRC PARP Agreement, if we failed to achieve national priority project status in the PRC Territory under its 12th or 13th five-year plan with respect to our pamiparib program in the PRC Territory by July 28, 2017, Merck KGaA, Darmstadt Germany has an option to acquire exclusive commercialization rights under the pamiparib program in the PRC Territory, which we refer to as the PRC Commercialization Option. If, however, we achieved national priority by July 28, 2017, Merck KGaA, Darmstadt Germany only has a right of first negotiation to acquire exclusive commercialization rights under the pamiparib program in the PRC Territory in the event we seek to license our intellectual property rights to a third party. We applied for national priority project status for pamiparib to be effective from the beginning of 2017, and our application is in process and we believe that it will be approved.  However, there have been unanticipated governmental delays that have impacted the 2017 applicant pool for national project priority status and we expect that we will now receive formal notification in 2018.  As such, we intend to discuss with Merck KGaA, Darmstadt Germany the impact of this delay on the PRC Commercialization Option. 

Under the agreements, we are eligible to receive up to $7 million and $2.5 million, respectively, in payments upon the successful achievement of pre-specified clinical and regulatory milestones in the PRC Territory. In addition, if Merck KGaA, Darmstadt Germany exercises the PRC Commercialization Option, it is required to pay us a $50 million non-refundable payment upon such exercise, and we are eligible for a $12.5 million milestone payment upon the successful achievement of a certain additional regulatory event in the PRC Territory. Also, in consideration for the licenses granted to us, we are required to pay Merck KGaA, Darmstadt Germany a high single-digit royalty on aggregate net sales of Licensed PARP Inhibitors in the PRC Territory.

The PRC PARP Agreement continues unless terminated as permitted by either party. Merck KGaA, Darmstadt Germany has the right to terminate due to our uncured breach or for convenience upon prior written notice. We have the right to terminate these agreements due to Merck KGaA, Darmstadt Germany's uncured breach or for any challenge brought against our licensed patent rights.

Lifirafenib

On May 24, 2013, we entered into license agreements with Merck KGaA, Darmstadt Germany for lifirafenib, which were amended in 2013 and 2015 and which we refer to respectively as the Ex-PRC BRAF Agreement and PRC BRAF Agreement. In March 2017, Merck KGaA, Darmstadt Germany informed us that it would not exercise a continuation option in the ex-PRC territory, and thus, the ex-PRC BRAF Agreement terminated in its entirety, except for certain provisions that survive termination. Under the PRC BRAF Agreement, Merck KGaA, Darmstadt Germany granted us an exclusive license under certain of its intellectual property rights to develop, manufacture and commercialize the RAF dimer inhibitor in the PRC, which we refer to as the PRC Territory, subject to certain non-compete restrictions. Further, pursuant to the PRC BRAF Agreement, Merck KGaA, Darmstadt Germany has an exclusive right of first negotiation to acquire exclusive commercialization rights under the lifirafenib BRAF program in the PRC Territory on terms to be mutually agreed in the event we seek to license our intellectual property rights to a third party in the territory.

Under these agreements, in December 2013, we received $13 million in non-refundable payments. As of December 31, 2017, we have received $9 million in milestone payments. We are eligible to receive an additional $14 million in payments upon the successful achievement of pre-specified clinical milestones in the PRC Territory. We are required to pay Merck KGaA, Darmstadt Germany a high single-digit royalty on aggregate net sales of the licensed compounds in the PRC Territory. 

The term of the PRC BRAF Agreement continues unless terminated as permitted by either party. Under the PRC BRAF Agreement, Merck KGaA has the right to terminate due to our uncured breach or voluntarily upon prior written notice. We have the right to terminate the PRC BRAF Agreement due to Merck KGaA’s uncured breach or for any challenge brought against our licensed patent rights.

Intellectual Property

The proprietary nature of, and protection for, our drug candidates and their methods of use are an important part of our strategy to develop and commercialize novel medicines, as described in more detail below. We have obtained a U.S. patentpatents and filed patent applications in the United States and other countries relating to certain of our drug candidates, and are pursuing additional patent protection for them and for other of our drug candidates and technologies. We also rely on trade secrets to protect aspects of our business that are not amenable to, or that we do not consider appropriate for, patent protection including our manufacturing processes.

Our success will depend significantly on our ability to obtain and maintain patent and other proprietary protection for our product candidates and other commercially important products, technologies, inventions and know-how, as well as on our ability to defend and enforce our patents including any patent that we have or may issue from our patent applications, preserve the confidentiality of our trade secrets and operate without infringing the valid and enforceable patents and proprietary rights of other parties. We also rely on know-how, continuing technological innovation and in-licensing opportunities to develop, strengthen and support our development programs.

As of March 15, 2016,February 19, 2018, we own four14 issued U.S. patents, and tennine pending U.S. patent applications, as well asprovisional applications, and corresponding patents and patent applications internationally. In addition, we own five10 pending international patent applications under the Patent Cooperation Treaty, or PCT, which we plan to file nationally in the United States and

·Lifirafenib.BGB-283. We own onetwo issued U.S. patent, onepatents, two pending U.S. patent application,applications, and one pending PCT application directed to BGB-283,lifirafenib, a small molecule BRAF inhibitor, and its use for the treatment of cancer, including BRAF mutated cancers. We also own pending patent applications in other jurisdictions corresponding to the U.S. patent application.applications. In addition, we plan to file nationally in the U.S. and other jurisdictions based on the pending PCT application. The expected expiration for the issued U.S. patentpatents is 2031, excluding any additional term for patent term extensions. Any patents that may issue from the currently pending U.S. patent applications would be expected to expire in 2031 and 2036, not including any patent term adjustments. If a U.S. application is filed based on the pending PCT application, a patent issuing from this application, if any, would be expected to expire in 2037. We intend to pursue marketing exclusivity periods that are available under regulatory provisions in certain countries.

The patent portfolios for our three in-licensed commercial products in China as of January 31, 2018 are summarized below:

ABRAXANE®.  We are the exclusive licensor of five issued Chinese patents and four pending Chinese patent applications directed to ABRAXANE®, a nanoparticle albumin–bound paclitaxel, and its use for the treatment of cancer. The expected expirations for the issued Chinese patents are 2018, 2021, 2026, and 2031 respectively, excluding any additional term for patent term extensions. Any patent that may issue from the currently pending U.S.Chinese patent applicationapplications would be expected to expire in 2031. If2023, 2026, or 2034.  In February 2018, a U.S. applicationgeneric version of albumin-bound palclitaxel was approved in China and another is filed based on the pending PCT application, a patent issuing from that application, if any, would be expected to expire in 2036. We intend to pursue marketing exclusivity periods that are availablecurrently under regulatory provisionsreview.

REVLIMID®.  We are the exclusive licensor of seven issued Chinese patents directed to REVLIMID®, and its use for the treatment of cancer, including MM. The expected expirations for the issued Chinese patents are 2023 and 2027 respectively, excluding any additional term for patent term extensions. The first lenalidomide generic in certain countries.China was approved in November 2017.

VIDAZA®.  We do not have any rights in any issued China patent or pending China patent applications directed to VIDAZA®, a chemical analog of cytidine, and its use for the treatment of cancer.  We are aware of third parties who are seeking to develop and obtain approval for generic forms of this drug.

Under our license agreement with Celgene, Celgene retains the responsibility for, but is not obligated, to prosecute, defend and enforce the patents for these in-licensed products. As such, any issued patents may not protect us from generic competition for these drugs.

The term of individual patents may vary based on the countries in which they are obtained. In most countries in which we file, including the United States and China, the term of an issued patent is generally 20 years from the earliest claimed filing date of a non-provisional patent application in the applicable country. In the United States, a patent’s term may be lengthened in some cases by a patent term adjustment, which extends the term of a patent to account for administrative delays by the U.S.United States Patent and Trademark Office, or USPTO, in excess of a patent applicant’s own delays during the prosecution process, or may be shortened if a patent is terminally disclaimed over a commonly owned patent having an earlier expiration date. In addition, in certain instances, a patent term can be extended to recapture a portion of the term effectively lost as a result of the FDA regulatory review period. However, the restoration period cannot be longer than five years and the total patent term including the restoration period must not exceed 14 years following FDA approval.

In certain foreign jurisdictions similar extensions as compensation for regulatory delays are also available. The actual protection afforded by a patent varies on a claim by claim and country by country basis and depends upon many factors, including the type of patent, the scope of its coverage, the availability of any patent term extensions or adjustments, the availability of legal remedies in a particular country and the validity and enforceability of the patent.

priority of claimed invention or validity of such patent applications as well as our own patent applications and issued patent.

For more information on these and other risks related to intellectual property, see “Item 1A—Risk Factors—Risks Related to Our Intellectual Property.”

Additionally, we currently useown a number of unregisteredregistered trademarks and pending trademark applications. We currently have registered trademarks for BeiGene and our corporate logo in China, the European Union and other jurisdictions and are seeking trademark protection in jurisdictions where available and appropriate. We currently have applications pending in China for BeiGene and our corporate logo.

Collaboration with Merck KGaA

BGB-283

On May 24, 2013, we entered into license agreements with Merck KGaA, which we amended and restated on December 10, 2013 and which we refer to respectively as the Ex-PRC BRAF Agreement and PRC BRAF Agreement. On October 1, 2015 and December 3, 2015, we further amended the Ex-PRC BRAF Agreement. Pursuant to the Ex-PRC BRAF Agreement and PRC BRAF Agreement (a) we granted to Merck KGaA an exclusive license under certain of our intellectual property rights to develop and manufacture, and, if Merck KGaA exercises its Continuation Option (described below), to commercialize and manufacture our compound BGB-283, and any other compound covered by the same existing patent rights with primary activity to inhibit wildtype or certain mutant BRAF, or the Licensed BRAF Inhibitors, in all countries of the world excluding The People’s Republic of China, which we refer to as the Ex-PRC Territory, and (b) Merck KGaA granted us an exclusive license under certain of its intellectual property rights to develop, manufacture and commercialize the Licensed BRAF Inhibitors in The People’s Republic of China, which we refer to as the PRC Territory, subject to the non-compete restrictions discussed below.

Under the Ex-PRC BRAF Agreement, Merck KGaA has the option to continue such agreement and obtain the exclusive commercialization rights described abovelogo in the Ex-PRC Territory, which we refer to as the Continuation Option, by notifying us of such election within 60 days (depending on whether we choose to conduct certain pre-specified Phase 1 clinical trials outside of China) following Merck KGaA’s receipt of the final results reports for the last of certain pre-specified Phase 1 clinical trials that we have retained the responsibility to perform. If Merck KGaA exercises its Continuation Option, it will pay us a continuation fee based on the costs of conducting the relevant trials, subject to a certain cap. If Merck KGaA does not exercise its Continuation Option, the Ex-PRC BRAF Agreement will terminate in its entirety except for certain provisions that will survive the termination. We have agreed to use commercially reasonable efforts to conduct certain pre-specified Phase 1 clinical trials.

Further, pursuant to the PRC BRAF Agreement, Merck KGaA has an exclusive right of first negotiation to expand its exclusive rights granted under the Ex-PRC BRAF Agreement to include the PRC Territory on terms to be mutually agreed in the event we seek to license our intellectual property rights to a third party therein. In addition, if we undergo a change of control and the Ex-PRC BRAF Agreement is still in effect, Merck KGaA has the right to do the same in exchange for pre-specified additional milestone payments for certain clinical events in the PRC Territory, but with other financial terms to be mutually agreed.

Under the Ex-PRC and PRC BRAF Agreements, we received $13 million in non-refundable payments in December 2013 following their execution. As of December 31, 2015, we have received $9 million in milestone payments. We are additionally eligible to receive up to $32 million, $33 million and $145 million, respectively, in payments upon the successful achievement of pre-specified clinical, regulatory and commercial milestones in the Ex-PRC Territory, and another $14 million in payments upon the successful achievement of pre-specified clinical milestones in the PRC Territory. Merck KGaA also is required to pay us tiered royalties ranging from the mid single-digit to the low-teens, on a country-by-country and Licensed BRAF Inhibitor-by-Licensed BRAF Inhibitor basis, on aggregate net sales of Licensed BRAF Inhibitors in the Ex-PRC Territory.

In consideration for the licenses Merck KGaA grants to us under the PRC BRAF Agreement, we are required to pay Merck KGaA a high single-digit royalty on aggregate net sales of Licensed BRAF Inhibitors in the PRC Territory.

·                  submission to the FDA of an Investigational New Drug, or IND, which must become effective before human clinical trials may begin;

·                  performance of adequate and well-controlled human clinical trials according to Good Clinical Practice, or GCP, to establish the safety and efficacy of the proposed product for its intended use;

·                  preparation and submission to the FDA of a New Drug Application, or NDA, for a drug, or a Biologics License Application, or BLA, for a biologic;

·                  a determination by the FDA within 60 days of its receipt of a NDA or BLA to file the application for review;

·                  satisfactory completion of an FDA inspection of the manufacturing facility or facilities at which the product, or components thereof, are produced to assess compliance with current Good Manufacturing Practices, or cGMP; and

·                  FDA review and approval of the NDA or licensing of the BLA.

The testing and approval process requires substantial time, effort and financial resources and we cannot be certain that any approvals for our drug candidates will be granted on a timely basis, if at all.

Once a pharmaceutical product drugcandidate is identified for development, it enters the preclinical testing stage. Preclinical tests include laboratory evaluations of product chemistry, toxicity, formulation and stability, as well as animal studies. An IND sponsor must submit the results of the preclinical tests, together with manufacturing information, analytical data and any available clinical data or literature, to the FDA as part of the IND. The sponsor must also include a protocol detailing, among other things, the objectives of the initial clinical trial, dosing procedures, subject selection and exclusion criteria, the parameters to be used in monitoring safety and the effectiveness criteria to be evaluated if the initial clinical trial lends itself to an efficacy evaluation. Some preclinical testing may continue even after the IND is submitted. The IND automatically becomes effective 30 days after receipt by the FDA, unless the FDA raises concerns or questions related to athe proposed clinical trial and places the trial on a clinical hold within that 30-day time period. In such a case, the IND sponsor and the FDA must resolve any outstanding concerns before the clinical trial can begin. Clinical holds also may be imposed by the FDA at any time before or during clinical trials due to safety concerns or

All clinical trials must be conducted under the supervision of one or more qualified investigators in accordance with GCP regulations. These regulations include the requirement that all research subjects provide informed consent in writing before their participation in any clinical trial. Further, an Institutional Review Board, or IRB, must review and approve the plan for any clinical trial before it commences at any institution, and the IRB must conduct continuing review and reapprove the study at least annually. An IRB considers, among other things, whether the risks to individuals participating in the clinical trial are minimized and are reasonable in relation to anticipated benefits. The IRB also approves the information regarding the clinical trial and the consent form that must be provided to each clinical trial subject or his or her legal representative and must monitor the clinical trial until completed.

Each new clinical protocol and any amendments to the protocol must be submitted forfiled with the FDA review,as an IND amendment, and to the IRBs for approval. Protocols detail, among other things, the objectives of the clinical trial, dosing procedures, subject selection and exclusion criteria, and the parameters to be used to monitor subject safety.

Human clinical trials are typically conducted in three sequential phases that may overlap or be combined:

We refer to our Phase 1 programprograms as dose-escalation and dose-expansion trials.

   In addition, we refer to some of our Phase 2 programs as pivotal or registrational programs, where the results can be used to support regulatory approval without the need to conduct a Phase 3 trial.

Progress reports detailing the results of the clinical trials must be submitted at least annually to the FDA and safety reports must be submitted to the FDA and the investigators for serious and unexpected suspected adverse events,AEs, any clinically important increase in the rate of a serious suspected adverse reaction over that listed in the protocol or investigator’s brochure, or any findings from other studies or animal or in vitro testing that suggest a significant risk in humans

exposed to the product drug. Phase 1, Phase 2 and Phase 3 testingstudies may not be completed successfully within any specified period, if at all. The FDA or the sponsor may suspend or terminate a clinical trial at any time on various grounds, including a finding that the research subjects or patients are being exposed to an unacceptable health risk. Similarly, an IRB can suspend or terminate approval of a clinical trial at its institution if the clinical trial is not being conducted in accordance with the IRB’s requirements or if the product has been associated with unexpected serious harm to subjects.

Concurrent with clinical trials, companies usually complete additional animal studies and must also develop additional information about the chemistry and physical characteristics of the product and finalize a process for manufacturing the product in commercial quantities in accordance with cGMP requirements. The manufacturing process must be capable of consistently producing quality batches of the product drug and, among other things, the manufacturer must develop methods for testing the identity, strength, quality and purity of the final product. Additionally, appropriate packaging must be selected and tested and stability studies must be conducted to demonstrate that the product drug does not undergo unacceptable deterioration over its shelf life.

U.S. Review and Approval Processes

The results of product development, preclinical studies and clinical trials, along with descriptions of the manufacturing process, analytical tests conducted on the product, proposed labeling and other relevant information, are submitted to the FDA as part of an NDA for a new drug or a BLA for a biologic, requesting approval to market the product. The submission of an NDA or BLA is subject to the payment of a substantial user fee; although a waiver of such fee may be obtained under certain limited circumstances. For example, the agency will waive the application fee for the first human drug application that a small business or its affiliate submits for review. The sponsor of an approved NDA or BLA is also subject to an annual prescription drug product and establishment user fees.

program fee.

The FDA reviews all NDAs and BLAs submitted to ensure that they are sufficiently complete for substantive review before it accepts them for filing. The FDA may request additional information rather than accept an NDA or BLA for filing. In this event, the NDA or BLA must be re-submitted with the additional information. The re-submitted application also is subject to review before the FDA accepts it for filing. Once the submission is accepted for filing, the FDA begins an in-depth substantive review. The FDA reviews an NDA to determine, among other things, whether a product is safe and effective for its intended use, and a BLA to determine whether the biologic is safe, pure, and potent for its intended use. The FDA also evaluates whether the product’s manufacturing is cGMP-compliant to assure the product’s identity, strength, quality and purity. Before approving an NDA or BLA, the FDA typically will inspect the facility or facilities where the product is or will be manufactured. The FDA will not approve an application unless it determines that the manufacturing processes and facilities are in compliance with cGMP requirements and adequate to assure consistent production of the product within required specifications. The FDA may refer the NDA or BLA to an advisory committee for review, evaluation and recommendation as to whether the application should be approved and under what conditions. An advisory committee is a panel of experts, including clinicians and other scientific experts, who provide advice and recommendations when requested by the FDA. The FDA is not bound by the recommendation of an advisory committee, but it considers such recommendations when making decisions.

The approval process is lengthy and difficult and the FDA may refuse to approve an NDA or BLA if the applicable regulatory criteria are not satisfied or may require additional clinical data or other data and information. Even if such data and information are submitted, the FDA may ultimately decide that the NDA or BLA does not satisfy the criteria for approval. Data obtained from clinical trials are not always conclusive, and the FDA may interpret data differently than we interpret the same data. The FDA will issue a complete response letter if the agency decides not to approve the NDA or BLA in its present form. The complete response letter usually describes all of the specific deficiencies that the FDA identified in the NDA or BLA that must be satisfactorily addressed before it can be approved. The deficiencies identified may be minor, for example, requiring labeling changes, or major, for example, requiring additional clinical trials. Additionally, the complete response letter may include recommended actions that the applicant might take to place the application in a condition for approval. If a complete response letter is issued, the applicant may either resubmit the NDA or BLA, addressing all of the deficiencies identified in the letter, or withdraw the application or request an opportunity for a hearing.

If a product receives regulatory approval, the approval may be significantly limited to specific diseases and dosages or the indications for use may otherwise be limited, which could restrict the commercial value of the product. Further, the FDA may require that certain contraindications, warnings or precautions be included in the product labeling. In addition, the FDA may require post-approval studies, including Phase 4 clinical trials, to further assess a product’s safety and effectiveness after NDA or BLA approval and may require testing and surveillance programs to monitor the safety

of approved products that have been commercialized. The FDA could also approve the NDA or BLA with a Risk Evaluation and Mitigation Strategy plan to mitigate risks, which could include medication guides, physician communication plans, or elements to assure safe use, such as restricted distribution methods, patient registries and other risk minimization tools.

Regulation of Combination Products in the United States

Certain products may be comprised of components that would normally be regulated under different types of regulatory authorities, and frequently by different centers at the FDA. These products are known as combination products. Specifically, under regulations issued by the FDA, a combination product may be:

·                  a product comprised of two or more regulated components that are physically, chemically, or otherwise combined or mixed and produced as a single entity;

·                  two or more separate products packaged together in a single package or as a unit and comprised of drug and device products, device and biological products, or biological and drug products;

·                  a drug, device, or biological product packaged separately that according to its investigational plan or proposed labeling is intended for use only with an approved individually specified drug, device, or biological product where both are required to achieve the intended use, indication, or effect and where upon approval of the proposed product the labeling of the approved product would need to be changed, e.g., to reflect a change in intended use, dosage form, strength, route of administration, or significant change in dose; or

·                  any investigational drug, device, or biological product packaged separately that according to its proposed labeling is for use only with another individually specified investigational drug, device, or biological product where both are required to achieve the intended use, indication, or effect.

Under the FDCA, the FDA is charged with assigning a center with primary jurisdiction, or a lead center, for review of a combination product. That determination is based on the “primary mode of action” of the combination product. Thus, if the primary mode of action of a device-drug combination product is attributable to the drug product, the FDA center responsible for premarket review of the drug product would have primary jurisdiction for the combination product. The FDA has also established an Office of Combination Products to address issues surroundingWe are developing combination products using our own drug candidates and provide more certainty to the regulatory review process. That office serves as a focal point for combination product issues for agency reviewers and industry. It is also responsible for developing guidance and regulations to clarify the regulation of combination products, and for assignment of the FDA center that has primary jurisdiction for review of combination products where the jurisdiction is unclear or in dispute.third-party drugs. 

Expedited Programs

Fast Track Designation

The FDA has a Fast Track program that is intended to expedite or facilitate the process for reviewing new drugs, including biologics that meet certain criteria. Specifically, new drugs are eligible for Fast Track designation if they are intended to treat a serious or life-threatening disease or condition for which there is no effective treatment and demonstrate the potential to address unmet medical needs for the condition. Fast Track designation applies to the combination of the product and the specific indication for which it is being studied. The sponsor of a new drug may request the FDA to designate the drug as a Fast Track product concurrently with, or at any time after, submission of an IND, and the FDA must determine if the drug candidate qualifies for fast track designation within 60 days of receipt of the sponsor’s request.

In addition to other benefits, such as the ability to engage in more frequent interactions with the FDA, the FDA may initiate review of sections of a Fast Track drug’s NDA or BLA before the application is complete. This rolling review is available if the applicant provides, and the FDA approves, a schedule for the submission of each portion of the NDA or BLA and the applicant pays the applicable user fees.fee. However, the FDA’s time period goal for reviewing an application does not begin until the last section of the NDA or BLA is submitted. Additionally, the Fast Track designation may be withdrawn by the FDA if the FDA believes that the designation is no longer supported by data emerging in the clinical trial process.

Accelerated Approval

Under FDA’s accelerated approval regulations, the FDA may approve a drug, including a biologic, for a serious or life-threatening illness that provides meaningful therapeutic benefit to patients over existing treatments based upon a surrogate endpoint that is reasonably likely to predict clinical benefit, or on a clinical endpoint that can be measured earlier than irreversible morbidity or mortality, that is reasonably likely to predict an effect on irreversible morbidity or mortality or other clinical benefit, taking into account the severity, rarity, or prevalence of the condition and the availability or lack of alternative treatments. In clinical trials, a surrogate endpoint is a marker, such as a laboratory measurement of laboratory or clinical signs of a disease or condition that is thought to predict clinical benefit, but is not itself a measure of clinical benefit. Surrogate endpoints can often be measured more easily or more rapidly than

clinical endpoints. A drug candidate approved on this basis is subject to rigorous post-marketing compliance requirements, including the completion of post-approval clinical trials sometimes referred to as Phase 4 trials to confirm the effect on the clinical endpoint. Failure to conduct required post-approval studies, or to confirm a clinical benefit during post-marketing studies, will allow the FDA to withdraw the drug from the market on an expedited basis. All promotional materials for drug candidates approved under accelerated regulations are subject to prior review by the FDA.

Breakthrough Designation

The Food and Drug Administration Safety and Innovation Act, or FDASIA, amended the FDCA to require the FDABreakthrough therapy designation is intended to expedite the development and review of a breakthrough therapy. A drug or biologic product can be designated as a breakthrough therapy if it is intended to treat a serious or life-threatening

disease or condition and preliminary clinical evidence indicates that it may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints. A sponsor may request that a product be designated as a breakthrough therapy concurrently with, or at any time after, the submission of an IND, and the FDA must determine if the candidate qualifies for breakthrough therapy designation within 60 days of receipt of the sponsor’s request. If so designated, the FDA shall act to expedite the development and review of the product’s marketing application, including by meeting with the sponsor throughout the product’s development, providing timely advice to the sponsor to ensure that the development program to gather preclinical and clinical data is as efficient as practicable, involving senior managers and experienced review staff in a cross-disciplinary review, and assigning a cross-disciplinary project lead for the FDA review team to facilitate an efficient review of the development program and to serve as a scientific liaison between the review team and the sponsor, and taking steps to ensure that the design of the clinical trials is as efficient as practicable.sponsor.

Priority Review

Based on results of the Phase 3 clinical trial(s) submitted in an NDA or BLA, upon the request of an applicant, theThe FDA may grant thean NDA for a new molecular entity or BLA a priority review designation, which sets the target date for FDA action on the application at six months after the FDA accepts the application for filing. Priority review is granted where there is evidence that the proposed product would be a significant improvement in the safety or effectiveness of the treatment, diagnosis, or prevention of a serious condition. If criteria are not met for priority review, the application is subject to the standard FDA review period of ten months after FDA accepts the application for filing. Priority review designation does not change the scientific/medical standard for approval or the quality of evidence necessary to support approval.

Post-Approval Requirements

Any products for which we receive FDA approval are subject to continuing regulation by the FDA, including, among other things, record-keeping requirements, reporting of adverse experiences with the product, providing the FDA with updated safety and efficacy information, product sampling and distribution requirements, complying with certain electronic records and signature requirements and complying with FDA promotion and advertising requirements. Moreover, each component of a combination product retains their regulatory status (as a drug or biologic, for example) and is subject to the requirements established by the FDA for that type of component. The FDA strictly regulates labeling, advertising, promotion and other types of information on products that are placed on the market. Products may be promoted only for the approved indications and in accordance with the provisions of the approved label. Further, manufacturers must continue to comply with cGMP requirements, which are extensive and require considerable time, resources and ongoing investment to ensure compliance. In addition, changes to the manufacturing process generally require prior FDA approval before being implemented and other types of changes to the approved product, such as adding new indications and additional labeling claims, are also subject to further FDA review and approval.

Manufacturers and other entities involved in the manufacturing and distribution of approved products are required to register their establishments with the FDA and certain state agencies, and are subject to periodic unannounced inspections by the FDA and certain state agencies for compliance with cGMP and other laws. The cGMP requirements apply to all stages of the manufacturing process, including the production, processing, sterilization, packaging, labeling, storage and shipment of the product. Manufacturers must establish validated systems to ensure that products meet specifications and regulatory requirements, and test each product batch or lot

prior to its release. We rely, and expect to continue to rely, on third parties for the production of clinical quantities of our drug candidates. Future FDA and state inspections may identify compliance issues at the facilities of our contract manufacturers that may disrupt production or distribution or may require substantial resources to correct.

The FDA may withdraw a product approval or revoke a biologics license if compliance with regulatory requirements is not maintained or if problems occur after the product reaches the market. Later discovery of previously unknown problems with a product may result in restrictions on the product or even complete withdrawal of the product from the market. Further, the failure to maintain compliance with regulatory requirements may result in administrative or judicial actions, such as fines, untitled or warning letters, holds on clinical trials, product recalls or seizures, product detention or refusal to permit the import or export of products, refusal to approve pending applications or supplements, restrictions on marketing or manufacturing, injunctions or civil or criminal penalties. We may undertake or be required to undertake a product recall.

Patent Term Restoration and Marketing Exclusivity

Depending upon the timing, duration and specifics of FDA approval of the use of our drug candidates, some of our U.S. patents may be eligible for limited patent term extension under the Drug Price Competition and Patent Term Restoration Act of 1984, commonly referred to as the Hatch-Waxman Act.Amendments. The Hatch-Waxman Act permitsAmendments permit a patent restoration term of up to five years as compensation for patent term lost during product development and the FDA regulatory review process. However, patent term restoration cannot extend the remaining term of a patent beyond a total of 14 years from the product’s approval date. The patent term restoration period is generally one-half the time between the effective date of an IND and the submission date of an NDA or BLA plus the time between the submission date of an NDA or BLA and the approval of that application, except that this review period is reduced by any time during which the applicant failed to exercise due diligence. Only one patent applicable to an approved product is eligible for the extension and the application for the extension must be submitted prior to the expiration of the patent. The USPTO, in consultation with the FDA, reviews and approves the application for any patent term extension or restoration. In the future, if available, we intend to apply for restorations of patent term for some of our currently owned patents beyond their current expiration dates, depending on the expected length of the clinical trials and other factors involved in the filing of the relevant NDA or BLA; however, there can be no assurance that any such extension will be granted to us.

Market exclusivity provisions under the FDCA can also delay the submission or the approval of certain applications. The FDCA provides a five-year period of non-patent marketing exclusivity within the United States to the first applicant to gain approval of an NDA for a new chemical entity. A drug is a new chemical entity if the FDA has not previously approved any other new drug containing the same active moiety, which is the molecule or ion responsible for the action of the drug substance. During the exclusivity period, the FDA may not accept for review an abbreviated new drug application,NDA, or ANDA, or a 505(b)(2) NDA submitted by another company for another version of such drug where the applicant does not own or have a legal right of reference to all the data required for approval. However, such an application may be submitted after four years if it contains a certification of patent invalidity or non-infringement. The FDCA also provides three years of marketing exclusivity for an NDA, 505(b)(2) NDA or supplement to an existing NDA if new clinical investigations, other than bioavailability studies, that were conducted or sponsored by the applicant are deemed by the FDA to be essential to the approval of the application, for example, for new indications, dosages or strengths of an existing drug. This three-year exclusivity covers only the conditions of use associated with the new clinical investigations and does not prohibit the FDA from approving ANDAs for drugs containing the original active agent. Five-year and three-year exclusivity will not delay the submission or approval of a full NDA. However, an applicant submitting a full NDA would be required to conduct or obtain a right of reference to all of the preclinical studies and adequate and well-controlled clinical trials necessary to demonstrate safety and effectiveness.

Pediatric exclusivity is another type of exclusivity in the United States. Pediatric exclusivity, if granted, provides an additional six months to an existing exclusivity or statutory delay in approval resulting from a patent

certification. This six-monthof exclusivity, which runs from the end of other exclusivity or patent period, may be granted based on the voluntary completion of a pediatric clinical trial in accordance with an FDA-issued “Written Request” for such a clinical trial.periods.

Biosimilars and Exclusivity

The Patient Protection and Affordable Care Act signed into law on March 23, 2010,PHSA includes a subtitle called the Biologics Price Competition and Innovation Act of 2009 which created an abbreviated approval pathway for biological products shown to be similar to, or interchangeable with, an FDA-licensed reference biological product. This amendment to the PHSA attempts to minimize duplicative testing. Biosimilarity, which requires that there be no clinically meaningful differences between the biological product and the reference product in terms of safety, purity, and potency, can be shown through analytical studies, animal studies, and a clinical trial or trials. Interchangeability requires that a product is biosimilar to the reference product and the product must demonstrate that it can be expected to produce the same clinical results as the reference product and, for products administered multiple times, the biologic and the reference biologic may be switched after one has been previously administered without increasing safety risks or risks of diminished efficacy relative to exclusive use of the reference biologic.

A reference biologic is granted twelve years of exclusivity from the time of first licensure of the reference product. The first biologic product submitted under the abbreviated approval pathway that is determined to be interchangeable with the reference product has exclusivity against other biologics submitting under the abbreviated approval pathway for the lesser of (i) one year after the first commercial marketing, (ii) 18 months after approval if there is no legal challenge, (iii) 18 months after the resolution in the applicant’s favor of a lawsuit challenging the biologics’biologic’s patents if an

application has been submitted, or (iv) 42 months after the application has been approved if a lawsuit is ongoing within the 42-month period.

Orphan Drugs

Under the Orphan Drug Act, the FDA may grant orphan drug designation to drugs, including biologics, intended to treat a rare disease or condition—generally a disease or condition that affects fewer than 200,000 individuals in the United States or that affects more than 200,000 individuals in the United States and for which there is no reasonable expectation that costs of research and development of the product for the indication can be recovered by sales of the product in the United States. Orphan drug designation must be requested before submitting an NDA or BLA.

After the FDA grants orphan drug designation, the generic identity of the drug or biologic and its potential orphan use are disclosed publicly by the FDA. Orphan drug designation does not convey any advantage in, or shorten the duration of, the regulatory review and approval process. The first NDA or BLA applicant to receive FDA approval for a particular active ingredient to treat a particular disease or condition with FDA orphan drug designation is entitled to a seven-year exclusive marketing period in the United States for that product, for that indication. Among the other benefits of orphan drug designation are tax credits for certain research and a waiver of the NDA or BLA application user fee.

During the exclusivity period, the FDA may not approve any other applications to market the same drug for the same disease or condition, except in limited circumstances, such as if the second applicant demonstrates the clinical superiority of its product to the product with orphan drug exclusivity through a demonstration of superior safety, superior efficacy, or a major contribution to patient care. “Same drug” means a drug that contains the same active moiety if it is a drug composed of small molecules, or the same principal molecular structural features if it is composed of macromolecules and is intended for the same use as a previously approved drug, except that if the subsequent drug can be shown to be clinically superior to the first drug, it will not be considered to be the same drug. DrugOrphan drug exclusivity does not prevent the FDA from approving a different drug for the same disease or condition, or the same drug for a different disease or condition.

Pediatric Information

Under the Pediatric Research Equity Act of 2003, NDAs, BLAs or supplements must contain data adequate to assess the safety and effectiveness of the product for the claimed indications in all relevant pediatric subpopulations and to support dosing and administration for each pediatric subpopulation for which the product is safe and

effective. The FDASIA amended the FDCA to require that a sponsor who is planning to submit a marketing application for a product that includes a new active ingredient, new indication, new dosage form, new dosing regimen or new route of administration submit an initial Pediatric Study Plan, or PSP, within 60 days of an end-of-Phase 2 meeting or as may be agreed between the sponsor and the FDA. The initial PSP must include an outline of the pediatric study or studies that the sponsor plans to conduct, including study objectives and design, age groups, relevant endpoints and statistical approach, or a justification for not including such detailed information, and any request for a deferral of pediatric assessments or a full or partial waiver of the requirement to provide data from pediatric studies along with supporting information. The FDA may, on its own initiative or at the request of the applicant, grant deferrals for submission of data or full or partial waivers. The FDA and the sponsor must reach agreement on the PSP. A sponsor can submit amendments to an agreed-upon initial PSP at any time if changes to the pediatric plan need to be considered based on data collected from preclinical studies, early phase clinical trials, and/or other clinical development programs.

Disclosure of Clinical Trial Information

Sponsors of clinical trials of FDA-regulated products, including drugs and biologics, are required to register and disclose certain clinical trial information, which is publicly available at www.clinicaltrials.gov.www.clinicaltrials.gov. Information related to the product, patient population, phase of investigation, study sites and investigators, and other aspects of the clinical trial is then made public as part of the registration. Sponsors are also obligated to discuss disclose the results of their clinical trials after completion. Disclosure of the results of these trials can be delayed until the new product or new indication being studied has been approved. Competitors may use this publicly available information to gain knowledge regarding the progress of development programs.

Pharmaceutical Coverage, Pricing and Reimbursement

Significant uncertainty exists as to the coverage and reimbursement status of any products for which we may obtain regulatory approval. In the United States, sales of any products for which we may receive regulatory approval for commercial sale will depend in part on the availability of coverage and reimbursement from third-party payors. Third-party payors, includeincluding government authorities, managed care providers, private health insurers and other organizations. The process for determining whether a payor will provide coverage for a product may be separate from the process for setting the reimbursement rate that the payor will pay for the product. Third-party payors may limit coverage to specific products on an approved list which might not include all of the FDA-approved products for a particular indication. Moreover, a payor’s decision to provide coverage for a product does not imply that an adequate reimbursement rate will be approved. Adequate third-party reimbursement may not be available to enable us to maintain price levels sufficient to realize an appropriate return on our investment in product development.

Third-party payors are increasingly challenging the price and examining the medical necessity and cost- effectivenesscost-effectiveness of medical products and services, in addition to their safety and efficacy. In order to obtain coverage and reimbursement for any product that might be approved for sale, we may need to conduct expensive pharmacoeconomic studies in order to demonstrate the medical necessity and cost-effectiveness of any products, in addition to the costs

required to obtain regulatory approvals. Our drug candidates may not be considered medically necessary or cost-effective. If third-party payors do not consider a product to be cost-effective or medically-necessary compared to other available therapies, they may not cover the product after approval as a benefit under their plans or, if they do, the level of payment may not be sufficient to allow a company to sell its products at a profit.

The U.S. government and state legislatures have shown significant interest in implementing cost containment programs to limit the growth of government-paid health care costs, including price controls, restrictions on reimbursement and requirements for substitution of generic products for branded prescription drugs. For example, the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act, collectively, the Affordable Care Act,or ACA, contains provisions that may reduce the profitability of drug products, including, for example, increased rebates for drugs reimbursed by Medicaid programs, extension of Medicaid rebates to Medicaid managed care plans, mandatory discounts for certain Medicare Part D beneficiaries and annual fees based on pharmaceutical companies’ share of sales to federal health care programs. Adoption of government controls and measures, and tightening of restrictive policies in jurisdictions with existing controls and measures, could limit payments for pharmaceuticals.

The marketability of any products for which we receive regulatory approval for commercial sale may suffer if the government and third-party payors fail to provide adequate coverage and reimbursement. In addition, an increasing emphasis on cost containment measures in the United States has increased and we expect will continue to increase the pressure on pharmaceutical pricing. Coverage policies and third-party reimbursement rates may change at any time. Even if favorable coverage and reimbursement status is attained for one or more products for which we receive regulatory approval, less favorable coverage policies and reimbursement rates may be implemented in the future.

Other U.S. Healthcare Laws and Compliance Requirements

If we obtain regulatory approval of our products,product candidates, we may be subject to various federal and state laws targeting fraud and abuse in the healthcare industry. These laws may impact, among other things, our proposed sales, marketing and education programs. In addition, we may be subject to patient privacy regulation by both the federal government and the states in which we conduct our business. The laws that may affect our ability to operate include:

The Affordable Care ActACA broadened the reach of the fraud and abuse laws by, among other things, amending the intent requirement of the federal Anti-Kickback Statute and the applicable criminal healthcare fraud statutes contained within 42 U.S.C. § 1320a-7b. Pursuant to the statutory amendment, a person or entity no longer needs to have actual knowledge of this statute or specific intent to violate it in order to have committed a violation. In addition, the Affordable Care ActACA provides that the government may assert that a claim including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the civil False Claims Act or the civil monetary penalties statute. Many states have adopted laws similar to the federal Anti-Kickback Statute, some of which apply to the referral of patients for healthcare items or services reimbursed by any source, not only the Medicare and Medicaid programs.

TheViolations of fraud and abuse laws may be punishable by criminal and/or civil sanctions, including penalties, fines and/or exclusion or suspension from federal False Claims Act prohibits anyone from, among other things, knowingly presenting, or causing to be presented, for payment to federaland state healthcare programs (includingsuch as Medicare and Medicaid) claims for items or services that are false or fraudulent. Although we would not submit claims directly to payors, manufacturers can be held liable under these laws if they are deemed to “cause”Medicaid and debarment from contracting with the submission of false or fraudulent claims by, for example, providing inaccurate billing or coding information to customers or promoting a product off-label. In addition, our future activities relating to the reporting of wholesaler or estimated retail prices for our products, the reporting of prices used to calculate Medicaid rebate information and other information affecting federal, state, and third-party reimbursement for our products, and the sale and marketing of our products, are subject to scrutiny under this law. For example, pharmaceutical companies have been prosecuted under the federal False Claims Act in connection with their off-label promotion of drugs. Penalties for a False Claims Act violation include three times the actual damages sustained by the government, plus mandatory civil penalties of between $5,500 and $11,000 for each separate false claim, the potential for exclusion from participation in federal healthcare programs, and, although the federal False Claims Act is a civil statute, conduct that results in a False Claims Act violation may also implicate various federal criminal statutes.U.S. government. In addition, private individuals have the ability to bring actions on behalf of the U.S. government under the federal False Claims Act and certain states have enacted laws modeled after the federal False Claims Act.

Patient Protection and Affordable Care Act

In March 2010, the Affordable Care Act was enacted, which includes measures that have or will significantly change the way health care is financed by both governmental and private insurers. Among the provisions of the Affordable Care Act of greatest importance to the pharmaceutical industry are the following:

·                  The Medicaid Drug Rebate Program requires pharmaceutical manufacturers to enter into and have in effect a national rebate agreement with the Secretary of the Department of Health and Human Services as a condition for states to receive federal matching funds for the manufacturer’s outpatient drugs furnished to Medicaid patients. Effective in 2010, the Affordable Care Act made several changes to the Medicaid Drug Rebate Program, including increasing pharmaceutical manufacturers’ rebate liability by raising the minimum basic Medicaid rebate on most branded prescription drugs from 15.1% of average manufacturer price, or AMP, to 23.1% of average manufacturer price, or AMP, and adding a new rebate calculation for “line extensions” (i.e., new formulations, such as extended release formulations) of solid oral dosage forms of branded products, as well as potentially impacting their rebate liability by modifying the statutory definition of AMP. The Affordable Care Act also expanded the universe of Medicaid utilization subject to drug rebates by requiring pharmaceutical manufacturers to pay rebates on Medicaid managed care utilization as of 2010 and by expanding the population potentially eligible for Medicaid drug benefits. The Centers for Medicare & Medicaid Services, or CMS, have proposed to expand Medicaid rebate liability to the territories of the United States as well. In addition, the Affordable Care Act provides for the public availability of retail survey prices and certain weighted average AMPs under the Medicaid program. The implementationfalse claims laws of this requirement by the CMS may also provide for the public availability of pharmacy acquisition of cost data, which could negatively impact our sales.several states.  

·                  In order for a pharmaceutical product to receive federal reimbursement under the Medicare Part B and Medicaid programs or to be sold directly to U.S. government agencies, the manufacturer must extend discounts to entities eligible to participate in the 340B drug pricing program. The required 340B discount on a given product is calculated based on the AMP and Medicaid rebate amounts reported by the manufacturer. Effective in 2010, the Affordable Care Act expanded the types of entities eligible to receive discounted 340B pricing, although, under the current state of the law, with the exception of children’s hospitals, these newly eligible entities will not be eligible to receive discounted 340B pricing on orphan drugs when used for the orphan indication. In addition, as 340B drug pricing is determined based on AMP and Medicaid rebate data, the revisions to the Medicaid rebate formula and AMP definition described above could cause the required 340B discount to increase.

·                  Effective in 2011, the Affordable Care Act imposed a requirement on manufacturers of branded drugs to provide a 50% discount off the negotiated price of branded drugs dispensed to Medicare Part D patients in the coverage gap (i.e., the “donut hole”).

·                  Effective in 2011, the Affordable Care Act imposed an annual, nondeductible fee on any entity that manufactures or imports certain branded prescription drugs, apportioned among these entities according to their market share in certain government healthcare programs, although this fee would not apply to sales of certain products approved exclusively for orphan indications.

·                  The Affordable Care Act required pharmaceutical and biologics manufacturers to track certain financial arrangements with physicians and teaching hospitals, including any “transfer of value” made or distributed to such entities, as well as any investment interests held by physicians and their immediate family members. Manufacturers were required to begin tracking this information in 2013 and to report this information to CMS beginning in 2014. The reported information was made publicly available in a searchable format on a CMS website beginning in September 2014.

·                  As of 2010, a new Patient-Centered Outcomes Research Institute was established pursuant to the Affordable Care Act to oversee, identify priorities in, and conduct comparative clinical effectiveness research, along with funding for such research. The research conducted by the Patient-Centered Outcomes Research Institute may affect the market for certain pharmaceutical products.

·                  The Affordable Care Act created the Independent Payment Advisory Board which has authority to recommend certain changes to the Medicare program to reduce expenditures by the program that could result in reduced payments for prescription drugs. Under certain circumstances, these recommendations will become law unless Congress enacts legislation that will achieve the same or greater Medicare cost savings.

·                  The Affordable Care Act established the Center for Medicare and Medicaid Innovation within CMS to test innovative payment and service delivery models to lower Medicare and Medicaid spending, potentially including prescription drug spending. Funding has been allocated to support the mission of the Center for Medicare and Medicaid Innovation from 2011 to 2019.

PRC Regulation

In the People’s Republic of China, or PRC, we operate in an increasingly complex legal and regulatory environment. We are subject to a variety of PRC laws, rules and regulations affecting many aspects of our business. This section summarizes the principal PRC laws, rules and regulations relevant to our business and operations.

PRC Drug Regulation

General RegulationsIntroduction

China heavily regulates the development, approval, manufacturing and distribution of drugs, including biologics.  The specific regulatory requirements applicable depend on whether the drug is made and finished in China, Foodwhich is referred to as a domestically manufactured drug, or made abroad and imported into China in finished form, which is referred to as an imported drug, as well as the approval or “registration” category of the drug.  For both imported and domestically manufactured drugs, China typically requires regulatory approval for a clinical trial, or CTA, prior to submitting an application for marketing approval. For a domestically manufactured drug, there is also a requirement for a drug manufacturing license for a facility in China. 

Timelines for approval in China historically have been long with the overall path to market taking as long as seven to ten years.  The CFDA, which is the chief drug regulator, historically has not had the resources to timely approve the thousands of new, generic, and supplemental drug applications it receives every year and significant application backlog of over 22,000 applications developed. Over the past several years, however, the CFDA has increased its resources and implemented various programs to reduce the time to market for drugs that meet a certain level of innovation or manufacturing and/or address certain unmet medical needs. The CFDA has been able to reduce the backlog of applications to an estimated 6,000 applications.

In 2017, the drug regulatory system entered a new and significant period of reform.  The State Council and the China Communist Party jointly issued a mandatory plan to further the reform of the review and approval system and encourage the innovation of drugs and medical devices, or the Innovation Opinion.  The expedited programs and other

advantages under this and other recent reforms encourage drug manufacturers to seek market approval in China first, manufacture domestically, and develop drugs in high priority disease areas, such as oncology.

To implement the regulatory reform introduced by the Innovation Opinion, the CFDA is currently revising the fundamental law, regulations, and rules regulating pharmaceutical products and the industry, which includes the framework law known as the PRC Drug Administration Law, or DAL.  The DAL is also generally implemented by a set of regulations issued by the State Council referred to as the DAL Implementing Regulation. The CFDA has its owns set of regulations implementing the DAL; the primary one governing clinical trial applications, marketing approval, and license renewal and amendment is known as the Drug Registration Regulation. However, as of January 2018 the implementing regulations for many of the reforms in the Innovation Opinion had not been announced, and therefore, the details in the implementation of the regulatory changes remained uncertain in some respects.

Regulatory Authorities

In the PRC, the China FoodCFDA is the primary regulator for pharmaceutical products and Drug Administration, or CFDA, monitors and supervisesbusinesses.  It regulates almost all of the administrationkey stages of the life-cycle of pharmaceutical products, as well as medical devicesincluding nonclinical studies, clinical trials, marketing approvals, manufacturing, advertising and equipment. promotion, distribution, and pharmacovigilance (i.e., post-marketing safety reporting obligations).  The Center for Drug Evaluation, or CDE, which is under the CFDA, conducts the technical evaluation of each drug and biologic application for safety and effectiveness.  Since 2015, the CFDA has more than doubled the staff of reviewers at the CDE to increase efficiency, and delegated authority to the CDE to issue final approvals of CTAs, supplemental applications to existing drug registrations, and renewals of licenses of imported drugs.  Before, final approval was the CFDA’s responsibility.

The CFDA’s primary responsibility includes evaluating, registering and approving new drugs, generic drugs, imported drugs and traditional Chinese medicines; approving and issuing permits forlocal counterparts (particularly the manufacture, export and import of pharmaceutical products and medical appliances; approving the establishment of enterprises for pharmaceutical manufacture and distribution; formulating administrative rules and policies concerning the supervision and administration of food, cosmetics and pharmaceuticals; and handling significant accidents involving these products. The local provincial drug administrative authoritiesprovincial-level FDAs, or PFDAs) are responsible for supervisionissuing and administrationrenewing relevant licenses for drug manufacturing and distribution businesses, conducting inspections of drugsmanufacturing and distribution businesses, and other post-marketing matters within their respective administrative regions.

regions (e.g., recall of pharmaceutical products). 

The PRC Drug Administration Law promulgated by the Standing Committee of the National People’s Congress in 1984Health and the Implementing Measures of the PRC Drug Administration Law promulgated byFamily Planning Commission, or NHFPC, formerly known as the Ministry of Health or MOH, is China’s chief healthcare regulator.  It is primarily responsible for overseeing the MOH, in 1989 set forth the legal framework for the administration of pharmaceutical products, including the research, development and manufacturing of drugs.

The PRC Drug Administration Law was revised in December 2001 and again in April 2015. The purpose of the revisions was to strengthen the supervision and administration of pharmaceutical products and to ensure the quality and safety of those products for human use. The revised PRC Drug Administration Law applies to entities and individuals engaged in the development, production, trade, application, supervision and administration of pharmaceutical products. It regulates and prescribes a framework for the administration of pharmaceutical preparationsoperation of medical institutions, which also serve as clinical trial sites, and forregulating the development, research, manufacturing, distribution, packaging,

pricinglicensure of hospitals and advertisementother medical personnel.  NHFPC plays a significant role in drug reimbursement.  Furthermore, the NHFPC and its local counterparts at or below the provincial-level of local government also oversee and organize public medical institutions’ centralized bidding and procurement process for pharmaceutical products.  Revised Implementing Measures ofThis is the PRC Drug Administration Law promulgated bychief way that public hospitals and their internal pharmacies acquire drugs.

Pre-Clinical and Clinical Development

The CFDA requires both pre-clinical and clinical data to support registration applications for imported and domestic drugs.  Pre-clinical work, including pharmacology and toxicology studies, must meet good laboratory practices, or GLP, issued in July 2017.  The CFDA accredits GLP labs and requires that nonclinical studies on chemical drug substances and preparations and biologics that are not yet marketed in China be conducted there.  There are no approvals required from the State Council took effect in September 2002, providing detailed implementing regulations forCFDA to conduct pre-clinical studies.

Registration Categories

Prior to engaging with the revised PRC Drug Administration Law.

Under these regulations, weCFDA on research and development and approval, an applicant will need to follow related regulationsdetermine the registration category for preclinical research, clinical trials and production of new drugs.

Good Laboratories Practice Certification for Preclinical Research

To improve the quality of preclinical research, the CFDA promulgated the Administrative Measures for Good Laboratories Practice of Preclinical Laboratory in 2003 and beganits drug candidate (which will ultimately need to conduct the certification program of Good Laboratories Practice, or the GLP. In April 2007, the CFDA issued the Circular on Measures for Certification of Good Laboratory Practice, or CFDA Circular 214, providing that the CFDA is responsible for certification of preclinical research institutions. Under CFDA Circular 214, the CFDA decides whether an institution is qualified for undertaking pharmaceutical preclinical research upon the evaluation of the institution’s organizational administration, its research personnel, its equipment and facilities and its operation and management of preclinical pharmaceutical projects. If all requirements are met, a GLP Certification will be issued by the CFDA and the result will be published on the CFDA’s website.

Currently for all our ongoing projects, we cooperated with CFDA certified GLP laboratories operated by Wuxi AppTec (Suzhou) Co., Ltd. and JOINN Laboratories (Beijing) to conduct the studies following GLP based on CFDA requirements.

Approval for Clinical Trials and Production of New Drugs

According to the Provisions for Drug Registration promulgated by the CFDA in 2007, Drug Administration Law promulgated and amended by the Standing Committee of the National People’s Congress in 2015, Circular on Regulations for Special Approval on New Drug Registration issued by the CFDA in 2009, and Circular on Information Publish Platform for Pharmaceutical Clinical Trials issued by the CFDA in 2013, we must complyconfirmed with the following proceduresCFDA), which will determine the requirements for its clinical trial and obtain several approvalsmarketing application.  There are five categories for clinical trials and production of new drugs.

Clinical Trial Application

Upon completion of its preclinical research, a research institution must apply for approval of a Clinical Trial Application before conducting clinical trials.

Special Examination and Approval for Domesticsmall molecule drugs:  Category 1 Pharmaceutical Products

Domestic Category 1 New Drugs Are Eligible for Special Examination and Approval

According(“innovative drugs”) refers to Provisions for Drug Registration promulgated by the CFDA in 2007, drug registration applications are divided into three different types, namely Domestic New Drug Application, Domestic Generic Drug Application, and Imported Drug Application. Drugs fall into one of three categories, namely chemical medicine, biological product, or traditional Chinese or natural medicine. A Category 1 drug isdrugs that have a new drugchemical entity that has nevernot been marketed anywhere in any country. Allthe world, Category 2 (“improved new drugs”) refers to drugs with a new indication, dosage form, route of our clinical-stage drug candidates qualify as domestic Category 1 new drugs.

According to Provisions onadministration, combination, or certain formulation changes not approved in the Administration of Special Examinationworld, Categories 3 and Approval of Registration of New Drugs, or the Special Examination and Approval Provisions promulgated by the CFDA in July 2009, the CFDA conducts special examination and approval for new drugs registration application when:

(1)         the chemical raw material medicines as well as the preparations and biological products thereof haven’t been approved for marketing home and abroad;

(2)         the new drugs4 are for treating AIDS, malignant tumorsgenerics that reference an innovator drug (or certain well-known generic drugs) marketed either abroad or in China,

respectively, and rare diseases, etc., and have obvious advantages in clinic treatment;Category 5 refers to originator or

(3)         the new generic drugs are for treating diseases with no effective methods of treatment.

Category 3 drugs are new drugs which have already been marketed abroad by multinational companies, but are not yet approved in China. ComparedChina (i.e., many imported drugs). 

Therapeutic biologics follow a similar categorization, with the application for Category 3 drugs, the application for Category 1 domesticbeing new to the world, but with fifteen product-specific categories.  Like with small molecule drugs, has a more straight-forward registration pathway. AccordingCategory 1 for biologics is also for innovative biologics that have not been approved inside or outside of China.  A clear regulatory pathway for biosimilars does not yet exist, but the CFDA may soon develop one in its revision of implementing rules pursuant to Provisionsthe Innovation Opinion. Each of zanubrutinib, tislelizumab, pamiparib and lifirafenib have obtained approval for Drug Registration, where a special examination and approval treatmentfrom the CDE and have been admitted to Category 1, which is granted, the applicationa favored category for clinical trialCTA and manufacturing will be handled with prioritymarketing approval.

Expedited Programs

Priority Evaluation and with enhanced communication with the CenterApproval Programs to Encourage Innovation

The CFDA has adopted several expedited review and approval mechanisms since 2009 and created additional expedited programs in recent years that are intended to encourage innovation.  Applications for Drug Evaluation of the CFDA, or the CDA, which will establish a working mechanism for communicating with the applicants. If it becomes necessary to revise the clinical trial scheme or make other major alterations during the clinical trial, the applicant may file an application for communication. When an application for communication is approved, the CDA will arrange the communication with the applicant within one month.

In comparison, according to Provisions for Drug Registration, the registration pathway for Category 3 drugs is complicated and evolving. Category 3 drug applications may onlythese expedited programs can be submitted after a company obtains an NDA approval and receive the CPP granted by a major regulatory authority, such as the FDA or the EMA. Multinational companies may need to applyCTA is admitted for conducting MRCTs, which means that companies do not have the flexibility to design the clinical trials to fit the Chinese patients and standard-of-care. Category 3 drug candidates may not qualify to benefit from fast track review with priority at the Clinical Trial Application stage. Moreover, a requirement to further conduct local clinical trials can potentially delay market access by several years from its international NDA approval. Further, according to Opinions on reforming the review and approval process for pharmaceutical products and medical devices issued by the Chinese State Council, orCDE.  Some of the State Council, in August 2015, which is a guidelinecurrent categories of drugs eligible for future legislation and CFDA examination, the drugs which have already been marketed abroadpriority status that may no longer be categorized as new drugs under the PRC law in the future, and therefore may not be able to enjoy any preferential treatmentparticularly relevant for new drugs.

Our drug candidates are all new therapeutic agents and we expect that all of our current drug candidates fall under theus include:  (1) Category 1 application process. In July 2015 the CFDAinnovative drugs that have not been approved our Clinical Trial Application including all phasesinside or outside of clinical trials for BGB-283. We have filed similar Clinical Trial Applications for BGB-3111, BGB-A317 and BGB-290.

Changes to the Review and Approval Process

In August 2015, the State Council issued a statement, Opinions on reforming the review and approval process for pharmaceutical products and medical devices, that contained several potential policy changes that could benefit the pharmaceutical industry:

·                  A plan to accelerate innovative drug approval with a special review and approval process, with a focus on areas of high unmet medical needs, including drugs for HIV, cancer, serious infectious diseases, orphan diseases and drugs on national priority lists.

·                  A plan to adopt a policy which would allow companies to act as the marketing authorization holder and to hire contract manufacturing organizations to produce drug products.

·                  A plan to improve the review and approval of clinical trials, and to allow companies to conduct clinical trials at the same time as they are in other countries and encourage local clinical trial organizations to participate in international multi-center clinical trials.

·                  A fast track drug registration or clinical trial approval pathway will be available for the following applications: (1) registration of innovative new drugs treating HIV, cancer, serious infectious diseases and orphan diseases;China; (2) registration of pediatriconcology drugs; (3) registration of geriatric drugs and drugs treating China-prevalent diseases; (4) registration of drugs sponsored by national science and technology grants; (5) registration of innovative drugs using advanced technology, using innovative treatment methods, orand having distinctiveclear therapeutic benefit; and (4) new drugs for which clinical benefits; (6) registration of foreign innovative drugs to be manufactured locally in China; (7) concurrent applications for new drug clinical trials which are already approved in the United States or European Union, or concurrent drug registration applications for drugs which have applied for marketing authorization applications have been filed simultaneously in China and passed onsite inspections in the United States or European Union and are manufactured in China using the same production line that passed FDA or EMA inspection.

If admitted to one of these expedited programs, an applicant will be entitled to more frequent and timely communication with reviewers at the CDE, expedited review and approval, and more agency resources throughout the approval process.  Each of our drug candidates zanubrutinib, tislelizumab, pamiparib and lifirafenib qualifies as domestic Category 1.

Conditional Approval

Under the Innovation Opinion, the CFDA may also grant “conditional approval” for innovative drugs that treat serious life-threatening diseases for which there are no effective therapies.  Under the most recent proposed implementing rules, and recent practice, the applicants would discuss the conditional approval with CDE at a formal consultation meeting on the pivotal study design or a pre-NDA meeting.  An application for conditional approval would also be submitted at the time of the marketing application.  Drugs approved under this program may have to complete a confirmatory study within a certain period of time in China;order to confirm the product’s efficacy and (8)safety profile and continue marketing.  There is no clear timeline for finalizing the implementation regulations for the conditional approval program.

CDE Guideline on PD-1/L1 NDA

In addition to the programs and proposals above, the CDE has recently stated that it will permit applicants for PD-1/L1 agents to submit data on a rolling basis based on the current high unmet medical need for PD-1/L1 agents.  In February 2018, the CDE released a new guideline on data requirements for NDA submissions of PD-1/L1 agents with single-arm trials (with ORR as the primary endpoint) on recurrent and refractory advanced cancers without standard-of-care therapies. Under the guideline, the sponsor must have a pre-NDA meeting with the CDE regarding the data and the NDA submission. The CDE will permit the following submission for these applicants: (1) an initial NDA submission with full preliminary safety data and effectiveness data, including the results of at least two independent therapeutic efficacy assessments of all patients who are currently enrolled pursuant to all of the protocol’s requirements; (2) during the CDE’s substantive technical review of the NDA, submission on a rolling basis of follow-up safety and effectiveness data from at least six months from the time of the last enrolled patient showing the duration of the response; and (3) submission of all efficacy and safety data as provided for under the protocol before final approval is granted by the CFDA. Sponsors may also apply for priority review and approval for their NDA to accelerate the progress.  If granted,

priority status will be applied to various stages of the approval process, including testing, manufacturing site inspection, technical review, and clinical site inspection.

Clinical Trials

Upon completion of pre-clinical studies, a sponsor typically needs to conduct clinical trials in China for registering a new drug in China.  The materials required for this application and the data requirements are determined by the registration category.  The CFDA has taken a number of steps to increase efficiency for approving CTAs, and it has also significantly increased monitoring and enforcement of GCP to ensure data integrity.

Trial Approval

All clinical trials conducted in China must be approved and conducted at hospitals accredited by the CFDA.  For imported drugs, proof of foreign approval is required prior to the trial, unless the drug has never been approved anywhere in the world.  In addition to a standalone China trial to support development, imported drug applicants may establish a site in China that is part of an international multicenter trial, or IMCT, at the outset of the global trial.  Domestically manufactured drugs are not subject to foreign approval requirements, and in contrast to prior practice, the CFDA has recently indicated its intent to permit those drugs to conduct development via an IMCT as well. 

In 2015, the CFDA began to issue an umbrella approval for all phases (typically three) of a new drug clinical trial, instead of issuing approval phase by phase.  For certain types of new drug candidates, clinical trial applications may be prioritized over other applications, and put in a separate expedited queue for approval.  Category 1 drugs are new drug trials which would qualify for this expedited umbrella approval status.  Other trials that are not part of these expedited lines could still wait up to a year for approval to conduct the trial.

The Innovation Opinion introduced other new measures to further expedite the clinical development process. Specifically, it requires that applicants for new drug trials conduct a meeting with urgent clinical need and patent expiry within three years, and marketing authorization applications for drugs with urgent clinical need and patent expiry within one year.

In February 2016, the CFDA releasedCDE prior to submitting the Opinions on Priority Review and Approval for Resolving Drug Registration Applications Backlog, which further clarified the following policies potentially accelerating the approval process of certain clinical trials or drug registrations which may benefit us:

·                  A fast track drug registration or clinical trial approval pathway will be available for the following drug registration applications with distinctive clinical benefits: (1) registration of innovative drugs not sold within or outside China; (2) registration of innovative drug transferred to be manufactured in China; (3) registration of drugs using advanced technology, using innovative treatment methods, or having distinctive treatment advantages; (4) clinical trial applications for drugs patent expiry within three years, and marketing authorization applications for drugs with patent expiry within one year; (5) concurrent applicationsCTA.  The Innovation Opinion also effectively introduces a notification system for new drug clinical trial approval.  In other words, trials can proceed if after certain fixed period of time (possibly 60 days), the applicant has not received any objections from the CDE, as opposed to the lengthier current clinical trial pre-approval process in which are already approvedthe applicant must wait for affirmative approval.  The Innovation Opinion also promises to expand the number of trial sites by truncating the timeline for accreditation by converting it from a pre-approval procedure into a notification procedure.  These reforms will require implementing law and regulations in the United States or European Union, or concurrent drug registration applications for drugs which have applied for marketing authorization and passed onsite inspectionsorder to proceed in the United States or European Union and are manufactured using the same production line in China; (6) traditional Chinese medicines (including ethnic medicines) with clear position in prevention and treatment of serious diseases; and (7) registration of new drugs sponsored by national key technology projects or national key development projects.

·                  A fast track drug registration approval pathway will be available for the following drugs registration application with distinctive clinical benefits for prevention and treatment of HIV, phthisis, virus hepatitis, orphan diseases, cancer, children’s diseases, and geriatrics.

In March 2016, the CFDA released a circular, CFDA Announcement on Reforms of Pharmaceutical Registration Classification, which outlined the re-classifications of drug applications. Under the new categorization, innovative drugs that have not been approved either in or outside China remain Category 1, while drugs approved outside China seeking marketing approval in China are now Category 5.

practice. The CFDA may release detailed policies regarding such abovementioned fast trackproposed implementing legislation in 2017 but it has not yet been finalized.

Human Genetic Resources Approval

An additional approval is required for any foreign companies or foreign affiliates that conduct trials in China.  Prior to entering into a clinical trial agreement and beginning a trial, the parties to a clinical trial (i.e., the foreign sponsor and the Chinese clinical trial site) are required to obtain a human genetic resources, or HGR, approval and drug registration pathway, and we expectto collect any biological samples that contain the CFDA review and approval process will improve over time. However, how and when this approval process will be changed is still subject to further policies to be issued by the CFDA and is currently uncertain.

Subsidies and Preferential Tax Treatment for “12-5 Major New Drugs Development Projects”

In 2012, the State Council adopted a “12-5 Major New Drugs Development Projects,” according to which a special fund was established by the government to encourage the developmentgenetic material of new drugs. Our BGB-283 drug candidate and another BRAF preclinical research project have been recognized as “12-5 Major New Drugs Development Projects” and received government subsidies of RMB 6,554,600 during the periodChinese human subjects from January 1, 2013 to December 31, 2015.

PRC Enterprise Income Tax Law and Its Implementation

The PRC Enterprise Income Tax Law, or EIT Law, and its implementation rules permit certain High and New Technologies Enterprises, or HNTEs, to enjoy preferential enterprise income tax rates subject to these HNTEs meeting certain qualification criteria. In April 2008, the State Administration of Taxation, the Ministry of Science and Technology, and any cross-border transfer of the Ministrysamples or associated data requires additional approval. Furthermore, one of Finance jointly issued the Administrative Ruleskey review points for the Certification of HighHGR review and New Technology Enterprises specifyingapproval process is the criteriaIP sharing arrangement between Chinese and procedures for the certification of HNTEs. In January 2016, revised version of the Administrative Rules for the Certification of High and New Technology Enterprises has been issued by the State Administration of Taxation, the Ministry of Science and Technology and the Ministry of Finance and replaced the 2008 version, while the material criteria of HNTEs remains unchanged.

Pursuant to the Temporary Regulations on Business Tax, which were promulgated by the State Council on December 13, 1993 and effective January 1, 1994, as amended on November 10, 2008 and effective January 1, 2009, any entity or individual conducting business in a service industry is generallyforeign parties. The parties are required to pay business tax atshare patent rights to inventions arising from the rate of 5% on the revenues generated from providing such services. However, if the services provided are related to technological development and transfer, such business tax may be exempted subject to approval bysamples. Conducting a clinical trial in China without obtaining the relevant tax authorities.HGR preapproval will subject the sponsor and trial site to administrative liability, including confiscation of HGR (samples and associated data), and administrative fines.

Clinical Trial Process and Good Clinical Practices

In November 2011, the Ministry of Finance and the State Administration of Taxation, or SAT, promulgated the Pilot Plan for Imposition of Value-Added Tax to Replace Business Tax, or the Pilot Plan. Since January 2012, the SAT has been implementing the Pilot Plan, which imposes value-added tax, or VAT,Typically drug clinical trials in lieu of business tax for certain industries in Shanghai. The Pilot Plan was expanded to other regions, including Beijing, in September 2012, and was further expanded nationwide beginning August 1, 2013. VAT is applicable at a rate of 6% in lieu of business taxes for certain services and 17% for the sale of goods and provision of tangible property lease services. VAT payable on goods sold or taxable services provided by a general VAT taxpayer for a taxable period is the net balance of the output VAT for the period after crediting the input VAT for the period.

Four Phases of Clinical Trials

A clinical development program consists of Phases 1, 2, 3 and 4.China have three phases.  Phase 1 refers to the initial clinical pharmacology and human safety evaluation studies in humans.studies. Phase 2 refers to the preliminary evaluation of a drug candidate’s therapeutic effectivenessefficacy and safety for particulartarget indication(s) in patients, provide evidence and support for the design ofpatients. Phase 3 clinical trial, and settle(often the administrative dose regimen. Phase 3pivotal study) refers to clinical trials undertaken to confirm the therapeutic effectiveness of a drug. Phase 3 is used to further verify the drug’sdrug candidate’s therapeutic effectivenessefficacy and safety on patients with target indication(s), to evaluate overall benefit-risk relationships of the drug, and ultimately to provide sufficient evidence for the review of drug registration application. Phase 4 refersThe CFDA requires that the different phases of clinical trials in

China receive ethics committee approval prior to approval of the CTA and comply with GCP.  The CFDA conducts inspections to assess GCP compliance and will cancel the CTA if it finds substantial issues. 

The CFDA may reduce requirements for trials and data, depending on the drug and the existing data.  The CFDA has granted waivers for all or part of trials, but it is now planning to take a more official position on the acceptance of foreign data to support an application.  The foreign data must meet the CFDA’s requirements, including, for drugs that have never been approved before in China, having sufficient Chinese ethnic data. The precise requirements are not yet clear.

Unlike innovative drugs, generic small molecule drugs are required to conduct a bioequivalence trial to demonstrate therapeutic equivalence to an originator drug marketed either in China or abroad or an internationally accepted generic drug.  The CFDA has released catalogues of reference products, and it released a first installment of a “marketed drug list” (China’s “Orange Book”) with information about drugs that may serve as reference products. 

China does not have a well-developed biosimilar pathway, but the CFDA will permit marketing of biosimilars after a comparative evaluation with an innovative biologic.  Currently follow-on comparative and bioequivalence studies could be permitted prior to the expiration of the innovative patent under an exemption for drug development in China’s Patent Law.

New Drug Application (NDA) and Approval

Upon completion of clinical trials, a sponsor may submit clinical trial data to support marketing approval for the drug.  For imported drugs, this means issuance of an import license.  Again, the applicant must submit evidence of foreign approval, unless it is an innovative drug that has never been approved anywhere in the world. 

Domestically manufactured drugs must similarly submit data in support of a drug approval number.  Under the current regime, upon approval of the registration application, the CFDA will first issue a new drug certificate to the applicant.  Only when the applicant is equipped with relevant manufacturing capability will the CFDA issue a Drug Manufacturing Approval Serial Number, which is effectively the marketing approval allowing the holder to market/commercialize the drug in China. 

Domestically established research institutions (including domestic companies) can apply through an MAH pilot program if they are established in one of 10 designated provinces (including Beijing and Shanghai) in China. The MAH pilot program permits research institutions and individuals to develop and hold the marketing approvals for drugs without holding a drug manufacturing license. The MAHs may engage contract manufacturers and distributors. 

The MAH pilot program is set to run until November 2018. The Innovation Opinion indicates that China will strive to implement the MAH system nationally as soon as possible by amending the DAL. The CFDA has proposed revisions to accomplish this purpose, but the timeline to finalize these proposals is still unclear.   

New Drug Monitoring Period

Currently, new varieties of domestically produced drugs approved under Categories 1 or 2 in China may be placed under a monitoring period for three to five years.  Category 1 innovative drugs will be monitored for five years.  During the monitoring period, the CFDA will not approve another CTA from another applicant for the same type of drug, except if another sponsor has an approved CTA at the time that the monitoring period is initiated it may proceed with its trial and become part of the period.  Therefore, by blocking other CTAs, the monitoring period can act as a type of market exclusivity.  Under the Innovation Opinion, it is not clear whether the monitoring period will remain in force. However, no documents have emerged to officially cancel it.

Manufacturing and Distribution

As noted above, China requires that all facilities that make drugs in China receive a drug manufacturing license with an appropriate “scope of manufacturing” from the local PFDA. This license must be renewed every five years.  A

separate certification of compliance with China’s drug Good Manufacturing Practice, or GMP, is also required, but this requirement may be eliminated as the Innovation Opinion is implemented.

Similarly, to conduct sales, importation, shipping and storage (“distribution activities”) a company must obtain a Drug Distribution License from the local PFDA, subject to renewal every five years. Like with GMPs, a separate certification of compliance with CFDA’s drug good supply practice, or GSP, is required.  These separate certifications for GMP and GSP compliance of the manufacturing and distribution facilities may be removed pursuant to the implementation of the Innovation Opinion.

Another critical reform in 2017 limits distribution chains to prevent corruption but presents challenges for procurement.  This policy, referred to as the “Two-Invoice System,” generally requires that at most two invoices may be issued throughout the distribution chain, with one from the manufacturer to a new drug’s post-marketing studydistributor and another from the distributor to assess therapeutic effectivenessthe end-user hospital. This excludes the sale of products invoiced from the manufacturer to its wholly owned or controlled distributors, or for imported drugs, to their exclusive distributor, or from a distributor to its wholly owned or controlled subsidiary (or between the wholly owned or controlled subsidiaries).  However, the system still significantly limits the options for companies to use multiple distributors to reach a larger geographic area in China. Compliance with the Two-Invoice System will become a prerequisite for pharmaceutical companies to participate in procurement processes with public hospitals, which provide most of China’s healthcare. Manufacturers and distributors that fail to implement the Two-Invoice System may lose their qualifications to participate in the bidding process. Non-compliant manufacturers may also be blacklisted from engaging in drug sales to public hospitals in a locality.

The Two-Invoice System was first implemented in 11 provinces that are involved in pilot comprehensive medical reforms. The objective is nationwide implementation by no later than 2018. Almost all the provinces and many cities have already adopted implementing rules for the Two-Invoice System.

Post-Marketing Surveillance

The manufacturer or marketing authorization holder of marketing approval is primarily responsible for pharmacovigilance, including quality assurance, adverse reaction reporting and monitoring, and product recalls. Distributors and user entities (e.g., hospitals) are also required to report, in their respective roles, adverse reactions of the products they sell or use, and assist with the manufacturer of the product recall.  A drug that is currently under the new drug monitoring period has to report all adverse drug reactions (as opposed to just serious adverse reactions) for that period.

The Innovation Opinion further clarifies that the MAH shall assume all legal responsibilities for the drug-related pre-clinical studies, clinical trials, production and manufacturing, marketing and distribution, adverse effect reporting, continuous studies, risk assessment and other relevant matters.

Advertising and Promotion of Pharmaceutical Products

China has a strict regime for the advertising of approved medicines.  No unapproved medicines may be advertised.  The definition of an advertisement is very broad, and does not exclude scientific exchange.  It can be any media that directly or indirectly introduces the product to end users.  There is no clear line between advertising and any other type of promotion.

Pursuant to the DAL and the Advertisement Law, prescription medicines may only be advertised to healthcare professionals in approved journals.  The individual advertisements themselves must also be approved by a local level PFDA.  In addition, advertisements are subject to strict content restrictions, which prohibit recommendations by doctors and hospitals and guarantees of effectiveness.  Advertising that includes content that is outside of the drug’s approval documentation (“off-label content”) is strictly prohibited.  False advertising can result in civil suits from end users and administrative liability, including fines   In addition to advertisements, websites that convey information about a drug must also be approved by a PFDA. 

The CFDA has also recently proposed to implement a separation between sales representatives and medical affairs representatives.  Medical affairs representatives will be in charge of academic promotion of the drugs and technical consulting with health care professionals, but they may not be involved in sales.  Lists of company medical affairs representatives may have to be registered with CFDA in the future.

Regulatory Intellectual Property Reforms

The Innovation Opinion also includes several intellectual property related reforms.  First, it sets forth the basic elements of a patent linkage system to protect innovators, in which a follow-on applicant will be required to specify patents that are relevant to its application and notify relevant patent holders (including, innovators) within a specified period after filing its application, permitting them to sue to protect their rights.  The system will require that the CFDA continue to review the potentially infringing follow-on application during any lawsuit by the innovator.  However, the CFDA may not approve the follow-on application pending resolution of the patent litigation in favor of the follow-on application or for a specified period of time, whichever is shorter.  This reform will require implementing regulations.  To date, the CFDA has not issued a proposal. 

The Innovation Opinion also lays the foundation for the establishment of a system for regulatory data protection to protect innovators. Under this reform, when submitting an application for drug registration, an applicant may also submit an application for the drug is widely used,protection of its clinical trial data. Such protection will be available to evaluate overall benefit-risk relationshipsthe undisclosed clinical trial data of drugs falling into the following categories: innovative drugs, innovative therapeutic biologics, drugs that treat orphan diseases, pediatric drugs, and drugs for which there has been a successful patent challenge. During the data protection period (the length has not yet been determined), marketing applications for the same type of drugs submitted by any other applicant will not be approved, unless such applicant generates the data by itself or obtains the consent the holder of the data.

In addition, the Innovation Opinion introduces a patent term extension pilot program. The patent term extension system will provide appropriate compensation of patent life when marketing of the drug when used among general populationhas been delayed due to delays related to clinical trials and review and approval procedures.  To date, there has been no proposal for implementing regulations related to regulatory data protection or specific groups,patent term extension.

Reimbursement, Pricing and to adjustProcurement

While most Chinese healthcare costs were historically borne by patients themselves, in recent years the administration dose, etc.number of people covered by government and private insurance plans has significantly increased. There is state insurance covering urban employees, urban residents, and rural residents, as well as a growing private commercial insurance market. By the end of 2016, over 1.3 billion residents in China were enrolled in the national basic medical insurance program, and over 1 billion residents in China were enrolled in the critical disease insurance program.

Reimbursement under the national medical insurance program

New Drug Application

When Phases 1, 2 and 3Under the current program, participants of the clinical trials have been completed, the applicant must applynational medical insurance program and their employers, if any, are required to contribute to the CFDApayment of insurance premiums on a monthly basis. Program participants are eligible for approvalfull or partial reimbursement of the cost of medicines included in the National Reimbursement Drug List, or NRDL. A pharmaceutical product listed in the NRDL must be clinically needed, safe, effective, reasonably priced, easy to use, available in sufficient quantity, and must meet the following additional requirements:

Factors that affect the inclusion of a new drug application. The CFDA then determinespharmaceutical product in the NRDL include whether to approve the application according to the comprehensive evaluation opinion provided by the CDE of the CFDA. We have obtained approval of our Clinical Trial Applicationproduct is consumed in large volumes and commonly prescribed for BGB-283clinical use in the PRC and clinical trials are expectedwhether it is considered to be initiated. We must obtain approvalimportant in

meeting the basic healthcare needs of the general public. Since 2016, special consideration has been given to, among others, innovative drugs can be manufacturedwith high clinical value and sold indrugs for serious diseases.  In addition, the PRC market.

Good Manufacturing PracticeMinistry of Human Resources and Social Security has also been negotiating with manufacturers of expensive drugs with high clinical demands and proved effectiveness for price cuts in exchange for inclusion into the NRDL. The 2017 NRDL covers 2,535 drugs in total, including 339 new additions, with an emphasis on innovative drugs and drugs that treat cancer and other serious diseases.

Government price controls

All facilitiesIn June 2015, the Chinese government abolished the 15-year-old government-led pricing system for drugs, and techniques used inlifted the manufacturemaximum retail price requirement for most drugs, including drugs reimbursed by government medical insurance funds, patented drugs, and some other drugs. The government regulates prices mainly by establishing a consolidated procurement mechanism, restructuring medical insurance reimbursement standards and strengthening regulation of products for clinical use or for sale in the PRC must be operated in conformity with cGMP guidelinesmedical and pricing practices as establisheddiscussed below.

Centralized procurement and tenders

Under current regulations, public medical institutions owned by the CFDA. Failuregovernment or owned by state-owned or controlled enterprises are required to purchase pharmaceutical products through centralized online procurement processes. There are exceptions for drugs on the National List of Essential Drugs, which must comply with applicable requirements could result in the termination of manufacturingtheir own procurement rules, and significant fines.

Animal Test Permits

According to Regulations for the Administration of Affairs Concerning Experimental Animals promulgated by the State Science and Technology Commission in November 1988 and Administrative Measures on the Certificate for Animal Experimentation promulgated by the State Science and Technology Commission and other regulatory authorities in January 2001, performing experimentation on animals requires a Certificate for Use of Laboratory Animals. Applicants must satisfy the following conditions:

·                  Laboratory animals must be qualified and sourced from institutions that have Certificates for Production of Laboratory Animals;

·                  The environment and facilities for the animals’ living and propagating must meet state requirements;

·                  The animals’ feed and water must meet state requirements;

·                  The animals’ feeding and experimentation must be conducted by professionals, specialized and skilled workers, or other trained personnel;

·                  The management systems must be effective and efficient; and

·                  The applicable entity must follow other requirements as stipulated by the PRC laws and regulations.

We obtained a Certificate for Use of Laboratory Animals in 2012 regarding the scope of rats and mice.

Regulations Relating to Intellectual Property Rights

Patent

General

Pursuantcertain drugs subject to the Patent Lawcentral government’s special control such as toxic, radioactive and narcotic drugs, and traditional Chinese medicines.

The centralized procurement process takes the form of public tenders operated by provincial or municipal-level government agencies. The centralized tender process is typically conducted once every year. The bids are assessed by a committee randomly selected from a database of experts. The committee members assess the PRC and its implementation rules, patents in the PRC fall into three categories, namely invention patent, utility model and design patent. Invention patent refers to a new technical solution proposed in respect of a product, method or its improvement; utility model refers to a new technical solution that is practicable for application and proposed in respect of the shape, structure or a combination of both of a product; and design patent refers to the new design of a certain product in shape, pattern or a combination of both and in color, shape and pattern combinations aesthetically suitable for industrial application. Under the Patent Law of the PRC, the term of patent protection starts from the date the patent was filed. Patents relating to utility-models and designs are effective for ten years from the initial date the patent application was filed. The Patent Law of the PRC adopts the principle of “first to file,” which means where more than one person files a patent application for the same invention, a patent will be granted to the person who first filed the application.

Existing patents can become invalid or unenforceable due tobids based on a number of factors, including known or unknown prior art, deficiencies in patent applicationbut not limited to bid price, product quality, clinical effectiveness, product safety, level of technology, qualifications and lackreputation of novelty in technology. In the PRC, a patent must have novelty, innovationmanufacturer, after-sale services and practical application. Underinnovation.

Over the Patent Law of PRC, novelty means that before a patent application is filed, no identical invention or utility modellast decade, the government has been publicly disclosedusing various methods to ensure that drugs are offered at affordable prices. In 2009, the central government announced the campaign to implement a “zero markup” policy on essential drugs among basic healthcare institutions. In addition, the government began to allow medical institutions to collectively negotiate with manufacturers for a second price to further lower the already agreed bid price.  Further, the newly adopted Two-Invoice System is also aimed to reduce price mark-ups brought about by multi-tier distribution chains.

Other PRC national- and provincial-level laws and regulations

We are subject to changing regulations under many other laws and regulations administered by governmental authorities at the national, provincial and municipal levels, some of which are or may become applicable to our business. For example, regulations control the confidentiality of patients’ medical information and the circumstances under which patient medical information may be released for inclusion in any publicationour databases, or released by us to third parties. The privacy of human subjects in clinical trials is also protected under regulations, e.g., the case report forms must avoid disclosing names of the human subjects.

These laws and regulations governing both the disclosure and the use of confidential patient medical information may become more restrictive in the future, including restrictions on transfer of healthcare data. The Cybersecurity Law that took effect in 2017 designates healthcare as a priority area that is part of critical information infrastructure, and China’s cyberspace administration is trying to finalize a draft rule on cross-border transfer of personal information.

PRC Regulation of Foreign Investment

Investment activities in China by foreign investors are principally governed by the Guidance Catalogue of Industries for Foreign Investment, or the Catalogue, which was promulgated and is amended from time to time by the Ministry of Commerce of the PRC, or abroad or has been publicly used or made knownMOFCOM, and the National Development and Reform Commission. Pursuant to the public by any other means, whetherlatest

Catalogue effective in 2017, or the 2017 Catalogue, industries are divided into two categories: encouraged industries and the industries within the catalogue of special management measures, or the Negative List. The Negative List is further divided into two sub-categories: restricted industries and prohibited industries. Establishment of wholly foreign-owned enterprises is generally allowed in industries outside of China, nor has anythe Negative List. For the restricted industries within the Negative List, some are limited to equity or contractual joint ventures, while in some cases Chinese partners are required to hold the majority interests in such joint ventures. In addition, restricted category projects are subject to government approvals and certain special requirements. Foreign investors are not allowed to invest in industries in the prohibited category. Industries not listed in the Catalogue are generally open to foreign investment unless specifically restricted by other person filedPRC regulations. Pursuant to the 2017 Catalogue, the manufacture of pharmaceutical products falls in the encouraged industries for foreign investment.

Under PRC law, the establishment of a wholly foreign invested enterprise is subject to the approval of, or the requirement for record filing with, the patent authority an application that describes an identical inventionMOFCOM or utility modelits local counterparts and is published after the filing date. Patents in the PRC are filedforeign invested enterprise must register with the State Intellectual Property Office, or SIPO. Normally,competent administrative bureau of industry and commerce. In addition, the SIPO publishes an application for a pharmaceutical invention 18 months after the application is filed, which may be shortened upon request by the applicant. The applicant must apply to the SIPO for a substantive examination within three years from the date the application is filed.

Article 20establishment and change of the Patent Law of the PRC provides that, for an invention or utility model completed in China, any applicant (not just Chinese companies and individuals), before filing a patent application outside of China, must first submit it to the SIPO for a confidential examination. Failure to comply with this requirement will result in the denial of any Chinese patent for the subject invention. This added requirement of confidential examination by the SIPO has raised concerns by foreign companies who conduct research and development activities in the PRC or outsource research and development activities to service providers in the PRC. Currently we have three invention patents published by SIPO and one invention patent under the application process.

Patent Enforcement

Unauthorized use of patents without consent from owners of patents, forgery of the patents belonging to other persons, or engagement in other infringement acts against patent rights, will subject the infringers to tortious liabilities. Serious offences may beforeign-invested enterprises are subject to criminal penalties.

When a dispute arises as a resultrecord-filing procedures, instead of infringement of the patent owner’s patent right, PRC law requiresprior approval requirements, provided that the parties first attempt to settle the dispute through consultation between them. However, if the dispute cannot be settled through consultation, the patent owner,establishment or an interested party who believes the patent is being infringed, may either file a civil legal suit or file anchange does not involve special entry administrative complaint with the relevant patent administration authority under the SIPO. A PRC court may issue a preliminary injunction upon the patent owner’s or an interested party’s request before instituting any legal proceedings or during the proceedings. Damages for infringement are calculated as either the loss suffered by the patent holder arising from the infringement or the benefit gained by the infringer from the infringement. If it is difficult to ascertain damages in this manner, damages may be determined by using a reasonable multiple of the license fee under a contractual license. As in other jurisdictions, with one notable exception, the patent owner in the PRC has the burden of proving that the patent is being infringed. However, if the owner of a manufacturing process patent alleges infringement of its patent, the alleged infringer has the burden of proving that it has not infringed. To our knowledge, there are no disputes as to our infringement of any third party’s patent.measures.

Medical Patent Compulsory License

According to the Patent Law of the PRC, the SIPO may grant a compulsory license for manufacturing patented drugs and exporting them to countries or regions covered under relevant international treaties to which the People’s Republic of China has acceded.

Exemptions for Unlicensed Manufacture, Use and Import of Patented Drugs

According to the Patent Law of the PRC, any person may manufacture, use or import patented drugs for the purpose of providing information required for administrative examination and approval without authorization granted by the patent owner.

Trade Secrets

According to the Anti-Unfair Competition Law of the PRC, the term “trade secrets” refers to technical information and business information that is unknown to the public, that has utility and may create business interest or profit for its legal owners or holders, and that is maintained as a secret by its legal owners or holders.

Under this law, business persons are prohibited from employing the following methods to infringe trade secrets: (1) obtaining the trade secrets from the legal owners or holders by any unfair methods such as stealing, solicitation or coercion; (2) disclosing, using or permitting others to use the trade secrets obtained illegally under item (1) above; or (3) disclosing, using or permitting others to use the trade secrets, in violation of any contractual agreements or any requirements of the legal owners or holders to keep such trade secrets in confidence. If a third party knows or should have known of the above-mentioned illegal conduct but nevertheless obtains, uses or discloses trade secrets of others, the third party may be deemed to have committed a misappropriation of the others’ trade secrets. The parties whose trade secrets are being misappropriated may petition for administrative corrections, and regulatory authorities may stop any illegal activities and fine infringing parties in the amount of RMB 10,000–200,000. Alternatively, persons whose trade secrets are being misappropriated may file lawsuits in a PRC court for loss and damages caused by the misappropriation.

The measures to protect trade secrets include oral or written agreements or other reasonable measures to require the employees of, or persons in business contact with, legal owners or holders to keep trade secrets confidential. Once the legal owners or holders have asked others to keep trade secrets confidential and have adopted reasonable protection measures, the requested persons bear the responsibility for keeping the trade secrets confidential.

Regulations Relating to Foreign Exchange and Dividend DistributionRegistration of Offshore Investment by PRC Residents

Foreign Exchange Regulation

The Foreign Exchange Administration Regulations most recently amended in August 2008, are the principal regulations governing foreign currency exchange in China. Under the PRC foreign exchange regulations, payments of current account items, such as profit distributions and trade and service-related foreign exchange transactions, may be made in foreign currencies without prior approval from the State Administration of Foreign Exchange, or SAFE, by complying with certain procedural requirements. In contrast, approval from or registration with appropriate government authorities or designated banks is required when RMBRMB is to be converted into a foreign currency and remitted out of China to pay capital expenses such as the repayment of foreign currency-denominated loans.

In August 2008, SAFE issuedUnder current regulations, the Circular on the Relevant Operating Issues Concerning the Improvement of the Administration of the Payment and Settlement of Foreign Currency Capital of Foreign-Invested Enterprises, or SAFE Circular 142, regulating the conversion by a foreign-invested enterprise of foreign currency-registered capital into RMB by restricting how the converted RMB may be used. In addition, SAFE promulgated Notice on Issues concerning Further Clarifying and Regulating the Foreign Exchange Administration under Some Capital Accounts, or Circular 45, on November 9, 2011 to clarify the application of SAFE Circular 142. Under SAFE Circular 142 and Circular 45, RMB capital converted from foreign currency registered capital of a foreign-invested enterprise may only be used for purposes within the business scope approved by the applicable government authority and may not be used for equity investments within the PRC. In addition, SAFE strengthened its oversight of the flow and use of the RMB capital converted from foreign currency registered capital of foreign-invested enterprises. The use of such RMB capital may not be changed without SAFE’s approval, and such RMB capital may not, in any case, be used to repay RMB loans whose proceeds were not used. Furthermore, SAFE promulgated Notice on Issues Concerning Strengthening Administration of Foreign Exchange Services in November 2010, which tightens the regulation over settlement of net proceeds from overseas offerings, such as our initial public offering, and requires, among other things, the authenticity of settlement of net proceeds from offshore offerings to be closely examined and the net proceeds to be settled in the manner described in our prospectus or otherwise approved by our board of directors. Violations of these SAFE regulations may result in severe monetary or other penalties, including confiscation of earnings derived from such violation activities, a fine of up to 30% of the RMB funds converted from the foreign invested funds or in the case of a severe violation, a fine ranging from 30% to 100% of the RMB funds converted from the foreign-invested funds.

In November 2012, SAFE promulgated the Circular of Further Improving and Adjusting Foreign Exchange Administration Policies on Foreign Direct Investment, which substantially amends and simplifies the current foreign exchange procedure. Pursuant to this circular, the opening of various special purpose foreign exchange accounts, such as pre-establishment expenses accounts, foreign exchange capital accounts and guarantee accounts, the reinvestment of RMB proceeds by foreign investors in the PRC, and remittance of foreign exchange profits and dividends by a foreign-invested enterprise to its foreign shareholders no longer require the approval or verification of SAFE, and multiple capital accounts for the same entity may be opened in different provinces, which was not previously possible. In addition, SAFE promulgated the Circular on Printing and Distributing the Provisions on Foreign Exchange Administration over Domestic Direct Investment by Foreign Investors and the Supporting Documents in May 2013, which specifies that the administration by the SAFE or its local branches over direct investment by foreign investors in the PRC will be conducted by way of registration, and banks must process foreign exchange business relating to the direct investment in the PRC based on the registration information provided by SAFE and its branches.

Under the Circular of the SAFE on Further Improving and Adjusting the Policies for Foreign Exchange Administration under Capital Accounts promulgated by the SAFE on January 10, 2014 and effective from February 10, 2014, administration over the outflow of the profits by domestic institutions has been further simplified. In principle, a bank is no longer required to examine transaction documents when handling the outflow of profits of no more than the equivalent of $50,000 by a domestic institution. When handling the outflow of profits

exceeding the equivalent of $50,000, the bank, in principle, is no longer required to examine the financial audit report and capital verification report of the domestic institution, provided that it must examine, according to the principle of transaction authenticity, the profit distribution resolution of the board of directors (or the profit distribution resolution of the partners) relating to this profit outflow and the original copy of its tax record-filing form. After each profit outflow, the bank must affix its seal to and endorsements on the original copy of the relevant tax record-filing form to indicate the actual amount of the profit outflow and the date of the outflow.

On March 30, 2015, SAFE promulgated the Circular on Reforming the Management Approach regarding the Settlement of Foreign Exchange Capital of Foreign-invested Enterprises, or SAFE Circular 19, which became effective on June 1, 2015. According to SAFE Circular 19, the foreign exchange capital of foreign-invested enterprises may be settled on a discretionary basis, meaning that the foreign exchange capital in the capital account of a foreign-invested enterprise for which the rights and interests of monetary contribution has been confirmed by the local foreign exchange bureau (or the book-entry registration of monetary contribution by the banks) can be settled at the banks based on the actual operational needs of the foreign-invested enterprise. The proportion of such discretionary settlement is temporarily determined as 100%. The RMB converted from the foreign exchange capital will be kept in a designated account, and if a foreign-invested enterprise needs to make further payment from such account, it still must provide supporting documents and go through the review process with the banks.

Furthermore, SAFE Circular 19 stipulates that the use of capital by foreign-invested enterprises must adhere to the principles of authenticity and self-use within the business scope of enterprises. The capital of a foreign-invested enterprise and capital in RMB obtained by the foreign-invested enterprise from foreign exchange settlement must not be used for the following purposes:

(1) directly or indirectly used for the payment beyond the business scope of the enterprises or the payment prohibited by relevant laws and regulations;

(2) directly or indirectly used for investment in securities, unless otherwise provided by relevant laws and regulations;

(3)         directly or indirectly used for granting the entrusted extending loans in RMB,to non-related parties, unless permitted by the scope of business, repaying the inter-enterprise borrowing (including advances by the third party), or repaying the bank loans in RMB that have been sub-lent to the third party;business; and/or

(4) paying the expenses related to the purchase of real estate that is not for self-use, except for the foreign-invested real estate enterprises.

In 2017, new regulations were adopted which, among other things, relax the policy restriction on foreign exchange inflow to further enhance trade and investment facilitation and tighten genuineness and compliance verification of cross-border transactions and cross-border capital flows.

Our PRC subsidiaries’subsidiaries' distributions to theour offshore parent and their carrying out of cross-border foreign exchange activities shall comply withare subject to the various SAFE registration requirements described above.

Share Option Rules

Under the Administration Measures on Individual Foreign Exchange Control issued by the People’s Bank of China on December 25, 2006, all foreign exchange matters involved in employee share ownership plans and share option plans in which PRC citizens participate require approval from SAFE or its authorized branch. In addition, under the Notices on Issues concerning the Foreign Exchange Administration for Domestic Individuals Participating in Share Incentive Plans of Overseas Publicly-Listed Companies, or Share Option Rules, issued by the SAFE on February 15, 2012, PRC residents who are granted shares or share options by companies listed on overseas stock exchanges under share incentive plans are requiredRegulations Relating to (1) register with the SAFE or its local branches; (2) retain a qualified PRC agent, which may be a PRC subsidiary of the overseas listed company or another qualified institution selected by the PRC subsidiary, to conduct the SAFE registration and other procedures with respect to the share incentive plans on behalf of the participants; and (3) retain an overseas institution to handle matters in connection with their exercise of share options, purchase and sale of shares or interests and funds transfers.

Regulation of Dividend Distribution

The principal laws, rules and regulations governing dividend distribution by foreign-invested enterprises in the PRC are the PRC Company Law, of the PRC, as amended, the Wholly Foreign-owned Enterprise Law and its implementation regulations, and the EquitySino-foreign Joint Venture Law and its implementation regulations. Under these laws, rules and regulations,requirements, foreign-invested enterprises may pay dividends only out of their accumulated profit, if any, as determined in accordance with PRC accounting standards and regulations. Both PRC domestic companies and wholly-foreign owned PRC enterprises are required to allocate at least 10% of their respective accumulated after-tax profits each year, if any, to fund certain capital reserve funds until the aggregate amount of these reserve funds have reached 50% of the registered capital of the enterprises. A PRC company is not permitted to distribute any profits until any losses from prior fiscal years have been offset. Profits retained from prior fiscal years may be distributed together with distributable profits from the current fiscal year.

Labor Laws and Social Insurance

Pursuant to the PRC Labor Law and the PRC Labor Contract Law, employers must execute written labor contracts with full-time employees. All employers must comply with local minimum wage standards. Employers must establish a comprehensive management system to protect the rights of their employees, including a system governing occupational health and safety to provide employees with occupational training to prevent occupational injury, and employers are required to truthfully inform prospective employees of the job description, working conditions, location, occupational hazards and status of safe production as well as remuneration and other conditions. Violations of the PRC Labor Contract Law and the PRC Labor Law may result in the imposition of fines and other administrative and criminal liability in the case of serious violations.

In addition, according to the PRC Social Insurance Law, employers like our PRC subsidiaries in China must provide employees with welfare schemes covering pension insurance, unemployment insurance, maternity insurance, work-related injury insurance, medical insurance, and housing funds.

Rest of the World Regulation

For other countries outside of the United States and the PRC, the requirements governing the conduct of clinical trials, drug licensing, pricing and reimbursement vary from country to country. In all cases the clinical trials must be conducted in accordance with GCP requirements and the applicable regulatory requirements and the ethical principles having their origin in the Declaration of Helsinki.

Employees

If we fail to comply with applicable foreign regulatory requirements, we may be subject to, among other things, fines, suspension or withdrawal of regulatory approvals, product recalls, seizure of products, operating restrictions and criminal prosecution.

Manufacturing and Supply

We lease an approximately 140 square meter manufacturing facility in Beijing, PRC, which produces and supplies preclinical and clinical trial materials for some of our small molecule drug candidates. In addition, we expect to lease an 11,000 square meter space to build manufacturing facility in Suzhou, PRC. At the Suzhou manufacturing facility, we intend to produce drug candidates for clinical or, in the future, commercial use. We expect this facility to consist of one oral-solid-dosage production line for small molecule drug products and one pilot plant for monoclonal antibody drug substances. We also outsource to a limited number of external service providers the production of some drug substances and drug products, and we expect to continue to do so to meet the preclinical and clinical requirements of our drug candidates. For example, cell line and process development for BGB-A317 was completed by Boehringer Ingelheim, which is currently manufacturing BGB-A317 in China. We do not have a long-term agreement with these third parties. We have framework agreements with most of our external service providers, under which they generally provide services to us on a short-term, project-by-project basis.

Currently, we obtain drug raw materials for our manufacturing activities from multiple suppliers who we believe have sufficient capacity to meet our demands. In addition, we believe that adequate alternative sources for such supplies exist. However, a risk exists that an interruption supplies would materially harm our business. We typically order raw materials and services on a purchase order basis and do not enter into long-term dedicated capacity or minimum supply arrangements.

Manufacturing is subject to extensive regulations that impose various procedural and documentation requirements governing record keeping, manufacturing processes and controls, personnel, quality control and quality

assurance, among others. Our manufacturing facilities and the contract manufacturing organizations we use to manufacture our drug candidates operate under cGMP conditions. cGMP are regulatory requirements for the production of pharmaceuticals that will be used in humans. For most of our manufacturing processes a back-up cGMP manufacturer is in place or can easily be identified.

Employees

As of December 31, 2015,2017, we had 192 full-time employees and two part-timeapproximately 900 employees. Of these, 149 were engaged in full-time research and development and laboratory operations and 43 were engaged in full-time general and administrative functions. As of December 31, 2015, 187 of our employees were located in the PRC, six were located in the United States, and one was located in Australia. We have also engaged and may continue to engage independent contractors to assist us with our operations. None of our employees are represented by a labor union or covered by a collective bargaining agreement. We have never experienced any employment-related work stoppages, and we consider our relations with our employees to be good.

Financial Information and Segments

The financial information required under this Item 1 is incorporated herein by reference to the section of this Annual Report titled “Part II—Item 8—Financial Statements and Supplementary Data.” We operate in one business segment. See Note 2 to our consolidated audited financial statements included in this Annual Report. For financial information regarding our business, see “Part II—Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations” of this Annual Report and our consolidated audited financial statements and related notes included elsewhere in this Annual Report.

Corporate Information

We are an exempted company incorporated in the Cayman Islands with limited liability on October 28, 2010. Any company that is registered in the Cayman Islands but conducts business mainly outside of the Cayman Islands may apply to be registered as an exempted company. The principal executive office of our research and development operations is located at No. 30 Science Park Road, Zhong-Guan-Cun Life Science Park, Changping District, Beijing 102206, People’s Republic of China. Our telephone number at this address is +86 10 58958000. Our current registered office in the Cayman Islands is located at the offices of Mourant Ozannes Corporate Services (Cayman) Limited, 94 Solaris Avenue, Camana Bay, Grand Cayman KY1-1108, Cayman Islands. Our website address is www.beigene.com. We do not incorporate the information on or accessible through our website into this Annual Report, and you should not consider any information on, or that can be accessed through, our website as part of this Annual Report.

We own various applications and unregistered trademarks and servicemarks, including BeiGene, and our corporate logo. All other trade names, trademarks and service marks of other companies appearing in this Annual Report are the property of their respective holders. Solely for convenience, some of the trademarks and trade names in this prospectusdocument are referred to without the ® and ™ symbols, but such references should not be construed as any indicator that

their respective owners will not assert, to the fullest extent under applicable law, their rights thereto. We do not intend our use or display of other companies’ trademarks and trade names to imply a relationship with, or endorsement or sponsorship of us by, any other companies.

Available Information

We make available on or through our website certain reports and amendments to those reports that we file with or furnish to the U.S. Securities and Exchange Commission, or SEC, in accordance with the Securities Exchange Act of 1934, as amended, or the Exchange Act. These include our annual reports on Form 10-K, our quarterly reports on Form 10-Q, and our current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act. We also make available, free of charge on our website, the reports filed with the SEC by our executive officers, directors and 10% shareholders pursuant to Section 16 under the Exchange Act. We make this information available on or through our website free of charge as soon as reasonably practicable after we electronically file the information with, or furnish it to, the SEC. We use our website as a means of disclosing material non-public information and for complying with our disclosure obligations under Regulation FD.

Glossary of Scientific Terms

As used in this Annual Report, the scientific terms set forth below shall have the following meanings:

Item 1A.Risk Factors

The following section includes the most significant factors that may adversely affect our business and operations. You should carefully consider the risks and uncertainties described below and all information contained in this Annual Report, including our financial statements and the related notes and “Part II—Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations,” before deciding to invest in the ADSs. The occurrence of any of the events or developments described below could harm our business, financial condition, results of operations and growth prospects. In such an event, the market price of the ADSs could decline and you may lose all or part of your investment. Additional risks and uncertainties not presently known to us or that we currently deem immaterial also may impair our business operations

Risks Related to Our Financial Position and Need for Additional Capital

We are a globally focused biopharmaceutical company and have a limited operating history, which may make it difficult to evaluate our current business and predict our future performance.

We are a globally focused biopharmaceutical company formed in October 2010. Our operations to date have focused on organizing and staffing our company, business planning, raising capital, establishing our intellectual property portfolio and conducting preclinical studies and clinical trials of our current drug candidates, such as BGB-3111, BGB-A317, BGB-290 and BGB-283. We have not yet demonstrated ability to initiate or successfully complete large-scale, pivotal clinical trials, obtain regulatory approvals, manufacture a commercial scale drug, or arrange for a third party to do so on our behalf, or conduct sales and marketing activities necessary for successful commercialization. We have not yet obtained regulatory approval for, or demonstrated an ability to commercialize, any of our drug candidates. We have no products approved for commercial sale and have not generated any revenue from product sales. Consequently, any predictions you make about our future success or viability may not be as accurate as they could be if we had a longer operating history. In addition, as a new business, we may encounter unforeseen expenses, difficulties, complications, delays and other known and unknown factors.

We are focused on the discovery and development of innovative, molecularly targeted and immuno-oncology drugs for the treatment of cancers. Our limited operating history, particularly in light of the rapidly evolving cancer treatment field, may make it difficult to evaluate our current business and predict our future performance. Our short history makes any assessment of our future success or viability subject to significant uncertainty. We will encounter risks and difficulties frequently experienced by early-stage companies in rapidly evolving fields as we seek to transition to a company capable of supporting commercial activities. If we do not address these risks and difficulties successfully, our business will suffer.

We have incurred net losses in each period since our inception and anticipate that we will continue to incur net losses for the foreseeable future.

Investment in pharmaceutical product development is highly speculative because it entails substantial upfront capital expenditures and significant risk that a drug candidate will fail to gain regulatory approval or become commercially viable. We have devoted most of our financial resources to research and development, including our non-clinical development activities and clinical trials. We have not generated any revenue from product sales to date, and we continue to incur significant development and other expenses related to our ongoing operations. As a result, we are not profitable and have incurred losses in each period since our inception in 2010. For the years ended December 31, 2013, 2014 and 2015, we reported a net loss of $7.9 million, $18.5 million and $57.1 million, respectively, and had a deficit accumulated of $118.2 million as of December 31, 2015. Substantially all of our operating losses have resulted from costs incurred in connection with our research and development programs and from general and administrative costs associated with our operations.

We expect to continue to incur losses for the foreseeable future, and we expect these losses to increase as we continue our development of, and seek regulatory approvals for, our drug candidates, and begin to commercialize approved drugs, if any. Typically, it takes many years to develop one new drug from the time it is discovered to when it is available for treating patients. We may encounter unforeseen expenses, difficulties, complications, delays and other unknown factors that may adversely affect our business. The size of our future net losses will depend, in part, on the rate of future growth of our expenses, our ability to generate revenues and the timing and amount of milestones and other required payments to third parties in connection with our potential future arrangements with

third parties. If any of our drug candidates fail in clinical trials or do not gain regulatory approval, or if approved, fail to achieve market acceptance, we may never become profitable. Even if we achieve profitability in the future, we may not be able to sustain profitability in subsequent periods. Our prior losses and expected future losses have had, and will continue to have, an adverse effect on our shareholders’ equity and working capital.

We expect our research and development expenses to continue to be significant in connection with our continued investment in our cancer biology platform and our ongoing and planned clinical trials for our drug candidates, such as BGB-3111, BGB-A317, BGB-290 and BGB-283. Furthermore, if we obtain regulatory approval for our drug candidates, we expect to incur increased sales and marketing expenses. In addition, we will incur additional costs associated with operating as a public company. As a result, we expect to continue to incur significant and increasing operating losses and negative cash flows for the foreseeable future. These losses have had and will continue to have a material adverse effect on our shareholders’ deficit, financial position, cash flows and working capital.

We currently do not generate revenue from product sales and may never become profitable.

Our ability to generate revenue and become profitable depends upon our ability to successfully complete the development of, and obtain the necessary regulatory approvals for, our drug candidates, such as BGB-3111, BGB-A317, BGB-290 and BGB-283, as we do not currently have any drugs that are available for commercial sale. We expect to continue to incur substantial and increasing losses through the projected commercialization of our drug candidates. None of our drug candidates have been approved for marketing in the United States, the European Union, the People’s Republic of China, or PRC, or any other jurisdiction and may never receive such approval. Our ability to achieve revenue and profitability is dependent on our ability to complete the development of our drug candidates, obtain necessary regulatory approvals, and have our drugs manufactured and successfully marketed.

Even if we receive regulatory approval of our drug candidates for commercial sale, we do not know when they will generate revenue, if at all. Our ability to generate product sales revenue depends on a number of factors, including our ability to continue:

·                  completing research regarding, and non-clinical and clinical development of, our drug candidates;

·                  obtaining regulatory approvals and marketing authorizations for drug candidates for which we complete clinical trials;

·                  obtaining adequate reimbursement from third-party payors, including government payors;

·                  developing a sustainable and scalable manufacturing process for our drug candidates, including establishing and maintaining commercially viable supply relationships with third parties and establishing our own manufacturing capabilities and infrastructure;

·                  launching and commercializing drug candidates for which we obtain regulatory approvals and marketing authorizations, either directly or with a collaborator or distributor;

·                  obtaining market acceptance of our drug candidates as viable treatment options;

·                  identifying, assessing, acquiring and/or developing new drug candidates;

·                  addressing any competing technological and market developments;

·                  negotiating and maintaining favorable terms in any collaboration, licensing or other arrangements into which we may enter, such as our collaboration arrangements with Merck KGaA;

·                  maintaining, protecting and expanding our portfolio of intellectual property rights, including patents, trade secrets and know-how; and

·                  attracting, hiring and retaining qualified personnel.

In addition, because of the numerous risks and uncertainties associated with drug development, we are unable to predict the timing or amount of increased expenses, or when, or if, we will be able to achieve or maintain profitability. In addition, our expenses could increase beyond expectations if we are required by the U.S. Food and Drug Administration, or FDA; the China Food and Drug Administration, or CFDA; the European Medicines

Agency, or EMA; or other comparable regulatory authorities to perform studies in addition to those that we currently anticipate. Even if our drug candidates are approved for commercial sale, we anticipate incurring significant costs associated with the commercial launch of these drugs.

Our ability to become and remain profitable depends on our ability to generate revenue. Even if we are able to generate revenues from the sale of our potential drugs, we may not become profitable and may need to obtain additional funding to continue operations. If we fail to become profitable or are unable to sustain profitability on a continuing basis, then we may be unable to continue our operations at planned levels and be forced to reduce our operations. Even if we do achieve profitability, we may not be able to sustain or increase profitability on a quarterly or annual basis. Our failure to become and remain profitable would decrease the value of our company and could impair our ability to raise capital, expand our business or continue our operations. Failure to become and remain profitable may adversely affect the market price of the ADSs and our ability to raise capital and continue operations.

We will 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 and commercialization of our primary drug candidates.

We have financed our operations with a combination of equity and debt offerings, contracts, and private and public grants. Through December 31, 2015, we raised approximately $170 million in private equity financing and $10 million in non-convertible debt financings. To date, we have received a total of $37 million in upfront payments and milestone payments through our collaboration arrangements with Merck KGaA for BGB-283 and BGB-290. On February 8, 2016, we completed our initial public offering of the ADSs and received net proceeds of approximately $166.6 million, after deducting underwriting discount and offering expenses. Our drug candidates will require the completion of regulatory review, significant marketing efforts and substantial investment before they can provide us with any product sales revenue.

Our operations have consumed substantial amounts of cash since inception. Our operating activities provided $4.1 million, used $8.7 million, and used $39.8 million of net cash during the years ended December 31, 2013, 2014 and 2015, respectively. We expect to continue to spend substantial amounts on drug discovery advancing the clinical development of our drug candidates, and launching and commercializing any drug candidates for which we receive regulatory approval, including building our own commercial organizations to address certain markets.

We will need to obtain additional financing to fund our future operations, including completing the development and commercialization of our primary drug candidates: BGB-3111, BGB-A317, BGB-290 and BGB-283. We will need to obtain additional financing to conduct additional clinical trials for the approval of our drug candidates if requested by regulatory bodies, and completing the development of any additional drug candidates we might discover. Moreover, our fixed expenses such as rent, interest expense and other contractual commitments are substantial and are expected to increase in the future.

Our forecast of the period of time through which our financial resources will be adequate to support our operations is a forward-looking statement and involves risks and uncertainties, and actual results could vary as a result of a number of factors, including the factors discussed elsewhere in this “Risk Factors” section. We have based this estimate on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we currently expect. Our future funding requirements will depend on many factors, including, but not limited to:

·                  the progress, timing, scope and costs of our clinical trials, including the ability to timely enroll patients in our planned and potential future clinical trials;

·                  the outcome, timing and cost of regulatory approvals by the FDA, CFDA, EMA and comparable regulatory authorities, including the potential that the FDA, CFDA, EMA or comparable regulatory authorities may require that we perform more studies than those that we currently expect;

·                  the number and characteristics of drug candidates that we may in-license and develop;

·                  our ability to successfully commercialize our drug candidates;

·                  the amount of sales and other revenues from drug candidates that we may commercialize, if any, including the selling prices for such potential products and the availability of adequate third-party reimbursement;

·                  the amount and timing of the milestone and royalty payments we receive from our collaborators under our licensing arrangements, such as our collaboration with Merck KGaA;

·                  the cost of filing, prosecuting, defending and enforcing any patent claims and other intellectual property rights;