Assessing BeiGene Limited’s Gross Margin Trend

BeiGene’s top line

In the third quarter, BeiGene’s (BGNE) total revenue fell YoY (year-over-year) to $54.2 million from $220.21 million. During the quarter, it generated $10.24 million from the US market and $43.96 million from outside the United States. During the comparable period in 2017, it generated $137.4 million from the US market and $82.81 million from outside the United States.

BeiGene generates revenues from product sales and collaborations. Its net product revenue rose YoY to $38.45 million from $8.82 million, and its collaboration revenue fell YoY to $15.76 million from $211.39 million in the quarter.

Assessing BeiGene Limited’s Gross Margin Trend

Revenue forecast

In 2018 and 2019, BeiGene is expected to generate revenues of $208.44 million and $264.14 million, respectively, compared to $238.39 million in 2017. Meanwhile, its peers Amgen (AMGN), bluebird bio (BLUE), and Incyte (INCY) are expected to have revenues of $23.36 billion, $43.62 million, and $1.71 billion, respectively, in 2018.

Gross margin

In the third quarter, BeiGene’s cost of product sales, consisting of products purchased from Celgene, rose YoY to $8.71 million from $1.94 million. Its gross margin expanded YoY to 83.94% from 77.96%.

Expected trends

BeiGene’s gross margins are expected to be 83.8% and 82.48%, respectively, in 2018 and 2019 compared to 97.91% in 2017. Meanwhile, Amgen’s, Regeneron’s (REGN), and Incyte’s 2018 gross margins are expected to be 85.83%, 95.97%, and 95.43%, respectively.

Next, we’ll look at BeiGene’s operational performance.