BeOne Medicines Ltd.

Good day everyone. Welcome to B1 Q2 2025 earnings call webcast. All lines have been placed on mute to prevent any background noise. After the speaker's remarks there will be a question and answer session. At this time I would like to turn the call over to the company.

Hello and welcome. Thanks for joining us today. I'm Dan Mallor head of investor relations at B1 Medicines. Before we begin please note that you can find additional materials including a replay of today's webcast and presentation on the investor relations section of our website .B1Medicines.com. I would like to remind all participants that during this call we may make forward-looking statements regarding among other things the company's future prospects business strategy. Actual results may differ materially from those indicated and the forward statements has resulted various factors including those risks discussed in our most recent periodic report filed with the SEC. Please also carefully review the forward-looking statements disclaimer in the slide deck that accompanies this presentation. Reconciliation between gap and non-gap financial measures discussed on this call provided in the appendix to our presentation which is posted to our investor relations website along with our instruments. All information in this presentation is as of the date of this presentation we undertake no duty to update such information unless required by law. Now turning to today's call as outlined on slide three. John Euler our co-founder chairman and CEO will provide a business update. Aaron Rosenberg our CFO will provide an update on our second quarter financial results and financial guidance and Lai Wang our global head of R&D will discuss our R&D and pipeline progress. We will then open the call to questions I'll now pass the call over to John.

John. Thank you Dan and welcome everyone to our Q2 earnings call. We had a spectacular second quarter. Our revenue reached 1.3 billion which represents 42 percent -on-year growth. Gap earnings per ADS grew two dollars from Q2 of last year and we generated 220 million of free cash flow in Q2. This is an absolute increase of over 400 million versus last year. From a commercial perspective, Brukinsa has cemented itself as the number one BTK inhibitor in the U.S. market. This quarter we also hosted an R&D day where we shared three takeaways with you. First, why we believe our internal capabilities and our sense of urgency will drive superior returns on R&D. Second, how our hematology franchise is poised for sustained leadership into the next decade. And three, why you should pay close attention to our prolific and differentiated solid tumor pipeline. I want to come back now to Brukinsa, the cornerstone of our CLL franchise. Brukinsa's best in class profile has resulted in rapid adoption by patients and physicians across the U.S. despite launching in CLL nine years after Brutonib. Here we see the U.S. revenue performance of the three approved covalent BTK inhibitors since Brukinsa's CLL approval. The chart speaks for itself. The gap between us and the competition continues to widen. Brukinsa is both the market share leader and it's the fastest growing brand and it's the only BTK to be approved in five indications. Now the success of Brukinsa is not an accident. It's the direct result of an overwhelming body of evidence accumulated over more than a decade. This evidence is remarkable both for its strength as well as its consistency. When we designed Brukinsa, our preclinical hypothesis was that sustained inhibition of BTK in the disease compartment and improved selectivity for BTK over off-target kinases would translate to a differentiated medicine for patients. Since then, Brukinsa has treated thousands of patients in clinical trials and over 200,000 patients commercially. Brukinsa has differentiated itself each and every step of the way from human PK to clinical response to PFS and now in the market where it continues to generate compelling real-world data. As you know, the goal in oncology drug development is to hit the target hard and never let up, never give the cancer an opportunity to grow. As you can see on this slide, the prior generation BTK inhibitors only hit the target for a fraction of the day. But Brukinsa is different. It was designed to inhibit BTK 24 hours a day, seven days a week. We hypothesized that Brukinsa's superior target coverage would translate to superior clinical benefits for patients. As you can see on this slide, in the Alpine trial, Brukinsa drove higher responses compared to the previous trial. This result was clear at the earliest data cut and more importantly, it was maintained with longer follow-up. Next, we followed the data to see whether the collective and consistent results across preclinical human PK and tumor shrinkage would be associated with improved and sustained PFS. Clearly, it was. Brukinsa is the only BTK to demonstrate superior PFS and favorable safety in a -to-head trial against Ibrutinib. In the Alpine trial, Brukinsa exhibited a 34% reduced risk of progression or death and lower cardiac toxicity versus Ibrutinib. There were zero cardiac deaths in the Brukinsa arm versus six on the Ibrutinib arm. In the deletion 17P and TP53 subpopulations, which are the toughest patients to treat, Brukinsa's treatment effect was even more pronounced. Brukinsa showed a remarkable 52% reduced risk of progression or death versus Ibrutinib. The Alpine data showed that Brukinsa is the -in-class option for all types of patients, regardless of mutation or risk status. So fast forward to today. Patient and physician adoption has driven Brukinsa to be the top BTK inhibitor in the U.S. This slide shows two examples of recent presentations and publications supporting Brukinsa's differentiation versus both a Calibrutinib and Ibrutinib. On the left is a real-world study that demonstrated that patients treated with Brukinsa had longer time to discontinuation, lower discontinuation rates, and less health care resource utilization than those treated with a Calibrutinib and Ibrutinib across all patients. And this was even more pronounced in the population of older patients over 65, as shown here. On the right is just one example of another recent publication by a leading CLL KOL that recognizes Brukinsa's differentiated data and how Brukinsa can provide the best outcome for their patients. Looking beyond Brukinsa, B1 stands out as the only company with fully owned, differentiated, and potentially -in-class assets across all three foundational MOAs in CLL. We're already combining these assets in multiple Phase III trials with the goal of improving outcomes for patients even further. We believe our relentless focus on serial innovation in CLL positions us as the only company that can address the full scope of unmet patient need across all lines of therapy and subpopulations. With that said, we're far more than a CLL company. We're a global oncology company, and we have a wealth of upcoming milestones on the horizon. By the end of 2026, we expect the initial global approval of SONRO and potentially pivotal data for our BTK CDAC. Our internal clinical team will be running more than 20 Phase III trials, and we anticipate more than 10 -of-concept data readouts, and our research organization will again advance more than 10 NMEs into the clinic. And with that, I'll pass it over to Aaron to provide the financial update.

Thanks, John. Product revenue reached $1.3 billion in the second quarter, representing 41% -over-year growth. Brukinsa global revenues were $950 million, growing 49% -over-year, driven by strong performance across all geographies. As John mentioned, Brukinsa is now the clear value share leader in the growing US BTK market, and we continue to grow volume at a robust rate across all approved indications. This was seen again in Q2, with demand growth of 35% -over-year and 10% sequentially, driven by the quality and differentiation of our long-term clinical data across all patient types. With our strengthening market position, we have seen competition aggressively discount. Despite this, given our broad access strategy and having protected class status, the vast majority of patients have unfettered access to Brukinsa, and an even greater number achieve access upon appeal. We strongly believe in open access policy, which is clearly in the best interest for patients and preferred by doctors. Moving forward, we will continue to pursue contracting strategies seek to achieve this goal while preserving the value of our clinically differentiated innovative medicines for the long term. From a pricing perspective, Q2 performance includes a -single-digit benefit, largely associated with the annual increase taken at the beginning of the year. And as mentioned last quarter, we also see some modest additional benefits on net pricing from Medicare Part D reform, given our designation as a specified small manufacturer. We are confident in our long-term market leadership position for Brukinsa, and our revenue guidance fully factors in current market conditions. Meanwhile, Tevembra reported a 22% increase, reflecting continued market leadership in China, supplemented by early contributions from launch markets. Our in-licensed products also showed continued strength, growing 27% -over-year. Our China team launched Santa DataMav in the quarter, providing an important new treatment option for patients with -high-expression biliary tract cancer, a historically underserved patient population. Our geographically diverse product revenue mix continues to fuel strong growth across all key regions. The U.S. remains our largest market, generating $685 million, with -over-year growth of 43%. China revenue totaled $429 million, a 23% increase, supported by Tevembra and Brukinsa's market leadership and growth from our in-licensed assets. Europe contributed $152 million, with 87% -over-year growth as we continue our launch trajectory with Brukinsa, with increased share across all major markets. And rest of world markets grew 168%, driven by market expansions and new launches. Brukinsa launched in Japan in March and had the largest uptake in the class in the three months since. Tevembra is also launching in key markets, including Japan, South Korea, and Brazil, and we are encouraged by early market response. Turning to our Q225 GAP P&L, which illustrates our focus on top-line growth with meaningful margin expansion. Total revenue for the quarter was $1.3 billion, the drivers of which I've previously highlighted. Gross margin improved to approximately 87% from 85% in the prior quarter. This improvement reflects the benefits from favorable product mix, price, and production efficiencies. Operating expenses grew by 18%, totaling $1.1 billion as we are investing smartly to support our commercial growth and rapidly advance our innovative pipeline. Income tax expense of $5 million for the quarter includes discrete adjustments of approximately $14 million, primarily related to updated provision estimates for R&D tax credits. Our continued focus on margin expansion has translated to net income reaching $94 million in the quarter, representing diluted earnings per ADS of $0.84, a significant improvement as compared to the same quarter last year. Our non-GAP P&L includes adjustments for typical items with a full reconciliation provided in the event. Non-GAP net income raised $253 million, reflecting an increase of $230 million compared to the previous year. This performance translated to diluted non-GAP earnings per ADS of $2.25 for the second quarter. Given our execution, we are updating our full year 25 guidance, with total revenue expectations now ranging between $5 billion and $5.3 billion. The mid to high 80% range for gross margin reflects favorable mixed dynamics and the earlier realization of cost of goods efficiencies for TABIMBRA. It also accounts for recent and anticipated approval for Brookinsa's tablet formula. The tablet achieves a lower cost of goods in addition to the many patient benefits that this new formulation affords, including reduced pill burden and size, with improved support of dosing flexibility. Operating expense guidance is unchanged. We project operating expenses between $4.1 billion and $4.4 billion. We remain committed to achieving positive GAP operating income and we expect to generate positive free cash flow for the year. Free cash flow is a broader measure of cash generation, accounting for both operational activities as well as capital expenditures. We are pleased with our execution in the first half of 2025 and remain focused on full year delivery across all financial performance measures. And with that, I'd like to pass it over to Lai.

Thank you, Aaron. Hello, everyone. Thanks for joining us today. As John mentioned, we recently hosted an investor on the day. In addition to a data and a portfolio update, we talked about how B1R&D is at a pivotal moment in its journey. Over the years, we have built a strong research, internalized global chemical development, and manufacturing capabilities from ground up, allowing us to discover, develop, and deliver novel oncology medicines faster and more cost effectively than industry standards. Our strategically advantage capabilities are now at a scale and fully functional across R&D. You all know we have built a strong CLL franchise, but it took us a long time. Now, with all these newly built capabilities, we believe we can reproduce our success in CLL across our disease area of focus. And more importantly, do it much faster. This is very exciting. Our goal is to build a deep pipeline in each of these disease areas to create strong in-portfolio synergy. Next, some highlights from our R&D progress in the second quarter. We have filed the Sonos initial NDAs with the first two in China for relaxed refractory CLL and the relaxed refractory mentosel. The plan is to file mentosel in FORMA globally later this year with a longer follow-up. We presented over 60 abstracts from our HEM portfolio at ASCO, EHA, and ICML, and they initiated new phase three studies for Sonos and our BTK CDAC in the relaxed refractory CLL. In addition, we provided updates from our solitumor portfolio at ASCO and R&D day. For the CDK4 program, we're actively planning phase three trials for both first line and the second line FORMA receptor positive breast cancers. In the next few slides, I will walk you through our progress in CLL. We have built a comprehensive registration program that spans the full spectrum of CLL, from treatment IE to the relaxed refractory settings. In the front line setting, Burkinsa has already established itself as a leading BTK in capture, with a combination of Burkinsa plus SorontoCLAX, we're advancing what we believe will be the best in class fixed duration regimen. For relaxed refractory patients, our BTK degrader should become a cornerstone of continuous therapy. We're also advancing fixed duration regimens, including Sonon plus CD20 antibodies. In addition, we're evaluating Sonon plus BTK CDAC, which can potentially be used for patients in second line, regardless of what front line treatment was used. We're determined to offer CLL patients important options throughout their treatment journey. Sonon, our next generation BCL-train hipster, has key characteristics that position this product to be potentially best in class. Sonon is 14 times more potent than VanetteCLAX, which may translate into superior efficacy in the clinic. In addition, improved selectivity, shorter half-life, and the lack of drug accumulation could offer a more favorable overall safety profile. And perhaps most importantly, Sonon offers the opportunity for a more patient-friendly ramp up, with potentially only one clinical visit, yes, only one clinical visit during ramp up, compared to up to eight visits for VanetteCLAX. Sonon has a broader development program with three phase IIs for accelerated provosts and three ongoing phase III studies. Diving into the combination data, the Zani-Butinib plus SorontoCLAX ZS regimen achieved a very high rate of undetectable MRD minus four, 92% in the 320-milligram cohort, regardless of the risk status. With a median follow-up of 25.5 months, no PFS events have occurred in the 320-milligram cohort, and only one event occurred in the 160-milligram cohort. There are a total of 137 patients treated in this two cohorts combined, not a small data set. 35 patients have elected to stop the therapy after week 96, and all remain in remission, with some beyond 12 months without treatment. I would like to draw your attention to the table shown on this slide. With the normal caveats of a cross-trial comparison, ZS has demonstrated the highest UMRD rate and the unmatched PFS for the respective follow-up when compared to other venecrase-based fixed duration therapies. There are some important deficiencies with other fixed duration therapies, like the low 34% rate of UMRD and underwhelming three-year PFS rate of 77% observed with AV, despite the ultra-fit population studied in the Amplify trial. For the new treatment paradigm in fontanite CIO, safety and convenience are as important as efficacy. ZS showed a viable safety profile with fewer high-grade adverse events and no deaths. The associated with intravenous use of the albinotuzumab and the cardiac toxicity and associated with eputinib. In terms of patient convenience, we did not observe any clinical or laboratory TLS, and we are very optimistic that for the vast majority of patients, only one clinical visit during ramp-up will be required after ZANU leading. In conclusion, we believe that ZS combination has the potential to be the game changer for a fixed duration option for CIO patients. Moving to the third asset in our HEM franchise, our BTK cDAC is the most advanced BTK degrader in the clinic with the best in-class features. As a mechanism, degradation can overcome under preventing emergent resistance mutations and disrupt the scaffolding function of BTK proteins. Long half-life in the clinic has resulted in sustained BTK degradation with daily dosing. We have a broader development program ongoing, including two pivotal phase IIs for Excel approval, two ongoing phase IIIs, and one more in startup. We provided an update on BTK cDAC phase I results at EHOP. In the graph on the left, you can see our BTK cDAC trending towards almost two years of medium PFS in heavily pre-treated CIO patients, which looks favorable to the recently published pertibutin data from Bruan 321 study shown on the right. With the usual caveats of cross-trial comparison, the -to-head trial versus PURTO will start soon. Going beyond the CLL, here we present an overview of the broader clinical development plan and the clinical study across our HEM franchise in non-CLL indications, designed to maximize the clinical and commercial value of Brotensa, Sorantroclax, and the BTK cDAC as part of our strategy for our B-cell malignancy franchise and beyond. Moving on to the solid tumor, our solid tumor pipeline includes diverse modalities and mechanisms across three disease franchises, breast and gynecological cancers, lung cancers, and GI cancers. We revamped our entire solid tumor pipeline over the last two years. Every single asset you see on this slide either entered the connect in the past two years or will be in the connect by the end of this year. This showcases our ability to quickly establish a deep and highly competitive pipeline in disease areas of focus. The portfolio synergies created by this molecule should not be underestimated. Finally, I'd like to highlight a few key milestones within our pipeline. We have successfully achieved the critical goals we set at the beginning of the year with some completed ahead of the schedule, such as the CLL and the mental cell findings for Sorantroclax in China. In the latter half of the year, we anticipate several significant milestones, including the global finding of a Sorantroclax in the relaxed refractory mental cell. In addition, we expect potentially pivotal data from our BTK-CDAC, relaxed refractory CLL, and the initiated global findings in 2026. Turning to our early stage pipeline, as you have heard, we have a number of approved concept catalysts expected across multiple modalities and disease franchises. We're also actively moving some of the some of these assets into late stage development, including our CDK4 inhibitor and the B7H4 ADC. We look forward to sharing more data in future updates. And with that, I will turn the call back to Dan.

Thanks, Lai. We are now ready for Q&A. Joining us for the Q&A portion of the call is Xiaobin Wu, President and Chief Operating Officer, Matt Chalas, our General Manager of North America, and Mark Lanasa, Chief Medical Officer for Solid Tumors. I kindly ask participants to limit the number of questions to ensure we have time to hear from as many attendees today as possible. Operator, we are ready for the first question.

If you would like to ask a question, please use the raise hand icon, which can be found at the bottom of the webinar application. When you are called upon, please unmute your line and ask your question. We will now take a moment for the queue to assemble. Our first question comes from Jessica Fye with JP Morgan. Please unmute your line and ask your question.

Hey guys, good morning. Congrats on the strong quarter. Thanks for taking our questions. On Burkina, I think in the beginning of the year you mentioned you expect flat US net price this year. Has that expectation evolved at all now that we're halfway through the year and were there any inventory changes at the end of two queue relative to the end of one queue you might be able to quantify? Second, what was your reaction to the Bruin CLL 314 data for Fertile versus Imbruvica in that mixed front line and relapse population? And what are you going to be watching for when those details are eventually presented? Then lastly, for the CDK4, I think at the R&D day you had talked about starting the second line phase three trial as soon as 4Q25. And I see that's now in the press releases 2026. I guess recognizing that the like as early as framing doesn't definitively mean you were going to start it in late 25. What's the additional information you hope to gain prior to initiating that second line phase three trial? And can you confirm we should expect to see updated clinical data for that asset this year? Thank you.

Thanks, Jessica, for the question. So we have three parts to that question. I think the first on Burkinsa and net pricing. Maybe I'll ask Matt to comment on that.

Sure. Thanks for the question, Jessica. And yet we anticipate stable pricing through the remainder of the year and similarly have no significant inventory levels to comment on.

The second part of that question was the 314 reaction lie. I think I'd point that one to you.

Yeah, thanks for that question. It is important to note that in the 314 study, OR security was not formally tested. Therefore, it is not statistically significant. I also want to point out including the treatment IE patients is likely to help the OR difference. Our study of a Burkinsa versus a butinette in the last factory still remains the only head to head trial to demonstrate the superiority of one BDK inhibitor over another based on PFS endpoint. And the PFS endpoint is the golden standard in cell. We believe in this setting a positive readout on non-inferiority in OR compared to butinette is highly unlikely to be changing for the following reasons. Number one, there's no PFS data yet. Number two, it is compared to a butinette. Any new continuous BDK needs to demonstrate security over Burkinsa, not a butinette. Burkinsa should be the true standard now in treatment settings. Number three, I think it is still very early data. For BDK inhibitor, you really need a long follow up to demonstrate your therapeutic benefit. We also expect Pertro will primarily be sequenced after the COVID-19 BDK inhibitor. Particularly if we start thinking about the entire treatment journey for cell patients, it is hard to imagine this data set will convince physicians that a better option is to go with Pertro versus Burkinsa given the results from Burkinsa. Just a final note, I think the BRU314 alone is not sufficient for regulatory filing. As lately stated in their press release, it will be combined with 313 to form the basis for regulatory submission. BRU313 study is a Pertro versus BR in treatment of IV cell without 17P deletion. I think the key question here is whether BR is still a valid control and when it is filed for NDA in let's say 2026 if the trial is positive. Also, OSTrand I think will be another important element to watch out. I will pass this on to Mark to address the CDK4 question.

Thank you, Lai. Thank you, Jess. Good morning. We set an ambitious target for our first phase three start by the end of 2025. As the data are now coming in, we believe it would be prudent to let the data mature just a little bit more to inform our phase three dose level selection. The magnitude of delay will be very modest, but it happens to move it from late 2025 into early 26, which is why we're providing this updated guidance. I would also highlight for the first time, we're disclosing our intent to start a frontline study with our CDK4 inhibitor in 2026. So we remain very excited about that program. To your other question, we intend to share the data from dose optimization in combination with full vestrin at this year's San Antonio Press Cancer Symposium.

Thank

you. Our next question comes from Sean Larmann at Morgan Stanley. Please unmute your line and ask your question.

Good morning, everyone. I hope everyone's well and thank you for taking my question. On the Celestial TNCLL trial, I think it's 303, ultimately a few proofs successful there. How do you think that the market plays out? Do you look at the V plus O combo as the initial target market? And how do you think about pricing if you're selling Bruchinser and Sonro into that market? And then what do you see or how should we think about the time-based therapy bleeding over into the normal course of operations or the rest of the market? Thanks. That's my first one.

Sure. Happy to address that one, Sean. I would say that we're very optimistic about the prospects for Xanon plus Sonro. And you've heard from Lai some of the clinical underpinnings of that. Certainly when it comes to our overall approach to driving adoption in CLL, we think that that's going to be one of the primary drivers. And from a pricing standpoint, we're going to look at various different comparators for it. When it comes to fixed duration overall, I can say that so far we haven't really seen much uptake of initial fixed-dose utilization. VEN plus BTK isn't approved in the U.S. at the current time, so usage is off-label. And we think that frankly, given what we've seen of the data so far, in comparison to continuous BTK, it would be inappropriate to see fixed-duration use right now. We've spoken many times. What we've seen of the current regimens that are available is that they're in very young and fit populations. And here I'm speaking about A-V that also have limited risk factors. And we think that the benchmark really hasn't been met for deep, durable responses, strong PFS, and safety and tolerability. However, to your point, with Celestial, we believe that Xanon plus Sonro is going to satisfy those benchmarks. So we don't see substantial fixed-dose or fixed-duration uptake in the near term. We see that BTK mono is going to continue to be strong. And then later, when we see the Xanon plus Sonro data, we see that there will be bigger opportunities for fixed-duration then.

Great. Thank you. And just on the PURTO equation, many KOLs we speak to, reticence to see or resident to say that they will see PURTO moving to 1L, even on good data, because they're potentially losing that second line option. But just to grab your latest thoughts on the resistance mechanisms associated with PURTO versus Brookinsir, just frame the risk for us there. That would be very useful.

Yeah, Mike, why don't you take that one?

Yeah, I can probably take that question. In terms of the resistance mechanisms, it's still evolving. And clearly, PURTO can work on covalent BTK inhibitor field population, especially for the cystidin 481 mutations. There are several other set of mutations PURTO can work on. So unless there's a really strong dataset demonstrating, I think the covalent BTK inhibitor works after PURTO. I do believe a physician wants to keep that option with the PURTO to be treated, to be used after the covalent BTK inhibitors. And for the other things which I mentioned earlier on is about the data for 314 is still very, very early. And it's only ORR 930. So why are you also eagerly waiting for that data to be matured? And most importantly, I think if something wants to go into the front line, it really needs to compare to Brookinsir. Now you're putting it in the more.

Thank you. In the interest of time, that's all I have for now. Thank you.

Our next question comes from Zee Chen with Goldman Sachs. Please unmute your line and ask your question.

Congratulations on a very strong quarter. Thank you for taking my questions. Just two questions on financials and also the year's tariff. We actually see the gross margin has been improved notably in second quarter compared to first quarter. So while the product revenue, we had seen 18% quarter over quarter gross, the absolute dollar amount for the cost of goods sold in second quarter was flatish versus first quarter. So could you help us understand a bit more about how you have been controlling the manufacturing costs and optimizing that? And because this is really not being explained by product mix change, we guess that definitely in terms of manufacturing Brookinsir, there has been some improvement. And another question is really on the US tariff impact on the gross margin side, because regarding the potential US tariff on the pharmaceutical imports, which I think President Trump said that there will be put up initially small tariff, then eventually it goes up to 150% in 18 months and getting up to 250%. So that's our guidance on the gross margin, which has been raised from mid 80s to high 80s, flat potential tariff, and how should we look at the gross margin assumptions going forward? Thank you.

Great. This is Eric. Thank you so much for the question. So I'll take it in two parts. You're right. We've seen some improvement in gross margin on a quarter over quarter basis, and certainly relative to last year. As I mentioned in my prepared remarks, that's really coming from improved production efficiencies, particularly for to Bimber. We have a bit of price and also from mix, but we're certainly making efforts across our manufacturer and supply chain to continue to drive an efficiency improvements. Largely in this quarter, it's to Bimber. And then I also did mention, as we think about the full year guide, the potential improvements or Kenza. It's a great question relative to the US tariffs. We've talked about in the past, how our current guidance contemplates what we know today about tariffs. And that impact has largely been mitigated by how we globalize regionalize our supply chain. And that includes our US production for Kenza and our investment in our Hopewell facility, where I sit today, where we're qualifying this facility for to Bimber production. As you mentioned, the big uncertainty remains around the current section two 32 investigation. We've all seen the headlines. We will monitor and obviously be very agile in our response to ensure both financial efficiency, as well as most importantly, operational efficiency is as we supply our life saving medicines for patients. Our, as I said, our 25 guide includes what we know today. Candidly, any announcements beyond that would likely not have a significant influence in our 25 results, just the way in which inventory is positioned and how that flows through the PNL. Future impacts, while we believe would be manageable within the context of our PNL, it's just really too early to say to provide to provide a forward outlook. Thank

you. Thank you for that. Just a quick one. Look at the filing you mentioned about second quarter. We saw benefit in that pricing for Burkina in the US. Could you elaborate a bit more on that? What has been the benefit and how should we look at the net pricing going forward?

Thank you. So as a great question, as we talked about historically, we do see relatively stable net pricing. That is what we are have seen in our current results. In my prepared remarks, we talked about mid single digit pricing in the US. This is largely the pull through of our early year price increases, which is consistent with market practice and well within, well within what the the requirements under the IRA mandates. We do see some incremental benefit on a year over year basis relative to Part D reform. I think we talked about at the last quarter, the prior year, including the manufacturing liability around the donut hole, which goes away and that's replaced this year by the manufacturer liability under the cost share. In our case, we do benefit from the specified small manufacturer designation. The combination of those two leads you to our mid single digit performance on a year over year basis for this year. I would say that modest benefit you see in the changes from Part D reform is something that you see more significantly in the front half of the year, given the lapping the donut hole, which largely occurs the first half just based on that prior regime.

Got it. Thank you so much. That's all my questions.

Our next question comes from Kelly Shi with Jefferies. Please unmute your line and ask your question.

Congrats, John. Another great quarter. Thanks for taking my questions. First one for the revenue guidance is 25 to $5.3 billion. What drove to this low end bump and specifically product underpin that outlook? And a second one, you point to 20 plus expected R&D milestones over the next 18 months. Could you provide more granularity on which one or which ones might have been the most impactful events? And lastly, what are the newest learnings from any translational studies regarding how B1's BTK degrader tackle resistance mutations acquired from the first-gen BTK inhibitors differently from PURTO? Thank you.

This is Aaron. Maybe I'll start. Thanks for the question. So our update to our revenue guidance to $5 billion to $5.3 billion really just reflects our confidence and execution in the first half of the year. We don't provide product revenue guidance, but I would just say, as you see in current quarter performance as well as Q1, across the portfolio, both from a product perspective and a geographic perspective, we're pleased with our performance and this update just signals our confidence in our execution. On that, maybe I'll hand it over to Lai on the R&D questions.

Yeah, I'll probably address the third question first about BTK degrader in terms of the resistance versus, let's say, PURTO. There are two well-known resistance to PURTO, which after the covalent BTK inhibitor, one of them is L528W, another one is T474 mutations. So far, BTK degrader can really work well with those mutations. And we're still at the early stage in terms of the experience of the BTK degrader in the clinic, so there haven't been that patients really progressed. We're actively following what kind of mutation, well, resistant mutation were emerging from the BTK degraders. But having said that, it does look much more promising in terms of be able to overcome more broader spectrum of the BTK mutation for degrader versus the PURTO protein. Also, we have done some translational work using the cell line, using the animal model. It does seem like the degrader can probably have longer tumor suppression compared to, let's say, a PURTO butynep or other covalent BTK inhibitors. The other question is about the exciting milestones. Maybe I will talk about what's on the heme side of it, then I will pass this over to Mark to comment on the solid tumor side of it. On the heme side of it, I think certainly be able to have suantoclax globally. This will mark the really important critical step for suantoclax. We are truly excited about this molecule for everything we have seen in the clinic. The combination of suantoclax plus zionibutinate is outstanding. Its own activity right now in the mental cell informa, which is the monocephaly study we did globally. The data looks really interesting. This really forms the basis for the initial global following. We are also now seeing activities for this one in the multiple myeloma, etc. It's not listed here, but certainly we are moving very aggressively about that one, the potential pivotal stage as well. On the degrader side of it, we are very excited to get the PURTO trial going. Probably it will be next couple of months. We will get the PURTO trials going. I think that one will potentially bring a better drug for patients in the relapse refractory settings. Mark?

Thanks again, Lai. Again, for the solid tumor, the most important data disclosure that we are likely to have for the remainder of 2025 will be our CDK4 data at San Antonio Breast Cancer Symposium. Many of the new molecules that Lai highlighted in the solid tumor portfolio will have early data emerging. We are very pleased with the progress of the portfolio. We are hopeful that we will be able to share data from multiple programs in the first half of 2026. As Lai mentioned, at the R&D day, we highlighted four programs, including CDK4, P7H4, PRNT5, and FGFR2B that are showing very encouraging early data. Again, we look forward to disclosing more data from those programs likely in the first half of next year.

Thanks, Fodkhali.

Sorry, maybe I just forgot to mention, which is the degrader will have the PURTO phase two readout next year and the hope that we're leading to also global filing for the degrader. That one is definitely a very important milestone as well.

Great, thanks.

Our next question comes from Yigal Nojomovic from Citigroup. Please unmute your line and ask your question.

Yeah, hi. Thank you very much. Just a few questions, a couple on Bruchinsa and then one on the pipeline. Regarding Bruchinsa, you mentioned the majority of patients have unfettered access and there's a step up in access on appeal. I'm wondering if you could just provide a little more specifics in terms of the numbers associated with the access out of the gates and then what the access on an appeal. And then more generally, just in terms of the overall business globally, obviously it shifted ex-China. I'm just wondering if you've reached a point where it's essentially steady state in terms of the product mix, revenue mix, China, Europe, United States, and you're going to see steady growth across the border if there's still an expectation of movement of revenue more than ex-China. And then lastly, maybe for Lai, could you comment more specifically on some of the powering assumptions on PFS with respect to the CDAC versus Piro phase three? Thank you.

Super. Hey, thanks for the question. And I'll start out and then hand things over to Aaron for revenue mix. Regarding your question around access out of the gate and then appeals, I think all of the access conversations start with our continued belief in for Kenza as a differentiated asset that's best in class amongst the BTKs and has this overwhelming body of evidence that John described, including thousands of patients in clinical trials. And we continue to evolve that with real world evidence and other data. So we're seeing a preference for Kenza with HCPs and with patients. And when it comes to the access component, oncology is a protected class and for Kenza continues to be listed on all Medicare Part D formularies. When it comes to that appeals process, it's important to remember that any preference or step edits don't impact existing patients at all. It's limited to new patients starts and here it's also important to remember that the majority of our claims are filled initially. And then if an appeals process is needed, we've been very successful in supporting accounts to work through that process. So going forward, we're really confident in continued access and growing demand and extending our value share. Aaron over to you for the next question.

Great. So I'll just really quickly and actually invite Xiaobing for his perspective, but certainly, Yigdao, we're growing globally. And as we think about the mix of business, every region is growing at different paces. We're still quite early in many parts of the world in our launch trajectory. We've historically talked about Europe being earlier. The rest of world markets, including really important markets globally, are even earlier in their launch cycle. So we would expect that our revenue mix to continue to diversify over time. But that's coming from a position of growth in all regions, including our China business. So Xiaobing, maybe I'll invite you to for your perspectives.

Yeah, sure. So as Aaron mentioned before, the biggest revenue driver today is US, and we achieved $685 million with a growth rate of 43%. China is the second biggest contributor and growth also 23%. And we just got the publication of the accurate data and we move up one position to be sixth biggest oncology company in China. And we grow very fast outside the US and also the China. In Europe, we grow close to 90%. In the rest of the world, means new markets and also Genpeg, we grow 170%. And then you can say the dynamic. In China, we grow continuously very strongly and far above the market. Outside China, we grow even much faster, including US, Europe, and the rest of the world. That is a very high dynamic and we grow actually everywhere.

Yeah, maybe to the last question about our degrader PFS, I think on the slide number 28, if you take a look at there was also a table under that PFS curve was to find out the patient population. We treated our cadence -on-one study had more pronounced therapy, but more importantly, the double exposed patient population was higher. And also we even have some patients who are triple exposed. When there was that kind of the worst pronounced patient population, we are seeing this nice PFS trend give us the confidence. But I don't have much more data than what you can see here because the data cut here was about much. So certainly we have some a bit more data, but over speaking, I think that it's definitely trending towards the right direction. But again, I want to point out this is a cost trial comparison.

Thank you. Our next question comes from Renny Benjamin at CitizensJMP. Please unmute your line and ask your question.

Hey, thanks guys. Congratulations on an amazing quarter and thanks for taking the questions. Maybe just to you're approved in 75 markets globally. Can you just remind us, you know, what's the total number of markets you'll be approved at in peak? And should this playbook be repeated for Tivimbra and Sonrada Clacks? Or are there other factors that that may impact, you know, which markets you go into with either of those two drugs? And then just talking about the tablet formulation, which you've, you know, mentioned in the prepared remarks, is this something that could materially impact sales going forward? Or does it really just impact, you know, the cost of goods? And does this ultimately replace the current formulation? Thanks.

For the first one, Dr. Wu, would you like to respond to the total number of markets at peak? Sure.

Sure. Our regulatory approval in so many countries, I can't remember anymore. We have a bunch of lists of over 70 countries, including all the major markets for both products, Tivimbra and Burkina Faso, US, EU, UK, Switzerland, and many other major markets. In addition to those major markets, we got also quite some approval, regulatory approval in the emerging markets, like India and Indonesia, Thailand, so many other, Brazil and Israel, and many other countries. It's most of those countries we launched products already, and we are also launching products in new markets.

And I'll gladly address the tablet question. This is primarily our commitment to patients, and ultimately this tablet will be a more convenient and easier to use formulation. With regard to impacting sales and the material away, we think that this will continue to solidify our market leadership position on a commercial basis. And then I think you also ask a great question around, will the formulation, you know, ultimately replace the capsule? In due course, we will move to simply having the tablet available for those patient-focused reasons.

Got it. And I'm sorry, just as a quick follow-up to Shabin's answer, is the 75 markets that you're currently, or greater than 70 markets that you're currently globally marketing in, is that it, or is there even more to be expected, right? Or have we penetrated as many, and now it's just growing in those markets that's important?

Yeah, great question. So we continue to expand our footprint. Just remember on our mission, and Beijing is set up also to, our mission is to reach out to many more patients. So to provide innovative and affordable medicine. Therefore, our mission continues, and we definitely want to expand to more markets. In addition to that, we also get some new indications in this already registered market, and expand to new indications. For the 70-plus registered countries, we do not have for every indication yet. In Tivonboro, and also for, even for Burkina Faso, we continue to register new indications. Yeah, expanding continues. Thank you very

much, and congrats again.

Our final question comes from Michael Schmidt with Guggenheim Park. Please unmute your line and ask your question.

Oh hey guys, thanks for taking my questions, and congrats on the great second quarter here. Bigger picture question on the covalent BTK inhibitor market in the US, which is still growing at 10% right now here in the first half of 2025. And so, yeah, just curious if you could comment on what is driving overall market growth right now in the covalent BTK space? Is it duration of treatment versus additional patients coming onto therapy? And how should we think about the peak potential for the class, especially as we think about potential fixed duration combinations coming in into the future? And then, how big of a near-term growth driver is the first-line MCL opportunity for Brokensa based on the mangrove data later this year? And then lastly, we're getting questions just on how you feel about expanding the BTK degrader development into autoimmune and inflammatory conditions. I know you mentioned you have a CSU study up and running now, but how should we think about the long-term potential of the degrader in autoimmune and inflammatory? Thanks so much.

I'm happy to start out with the questions around covalent BTKs and the market, as well as frontline manhole cell and mangrove, and then maybe then pass it over to Lai. I fully agree with your viewpoint that we see opportunities for longer DOT among the drivers. Certainly, if you look at Alpine or other data sources, you'll see that Brokensa's duration of therapy is longer, and of course, that goes hand in hand with better PFS. So, we do see that there'll be some growth potential within BTK for those reasons. For some of what we described earlier, we think that the current fixed duration regimens, including AV, don't offer the deep and durable responses, the high PFS and the safety and tolerability that really is the benchmark for treatment. So, we'll see what we believe will be continued mono-BTK growth in the market moving forward. Now, for manhole cell and mangrove, we're certainly very encouraged. We think that'll be a strong data set. Of course, manhole cell has limitations to the overall size of the patient prevalence and the opportunity for treatment. So, we'll certainly see growth potential, but CLL will continue to be our

focus. Thanks for the question. I think the question is related to how do we view about BTK degrader in non-oncology indication, especially for autoimmune? As you pointed out, we have started a study, a phase 1B study in the CSU. I want to point out two features about our BTK degrader. One of them is a public street features. Number one, it has really long half-life. This potentially can support different dosing frequency, which for certain disease, that might be very beneficial. Number two, it has brain penetration. I think that will be also applicable for certain autoimmune disease. Number three, I think this one, like the degrader mechanism, it can destroy scaffold function and the for certain disease area. That's also very important. We're actively exploring different potentials for this molecule in the autoimmune disease. So, stay tuned.

At this time, we've reached the end of the question and answer. I'll turn the call over to John Euler for closing remarks.

Thank you. In closing, our second quarter results demonstrate exceptional execution across our key priorities. Our success is due to the sense of urgency and dedication of our more than 11,000 colleagues across the globe and the joint efforts of the patients, clinicians, advocacy groups, regulators, and investors who have united with us in a joint effort and shared commitment to fight cancer globally. B1 has already helped more than 1.8 million cancer patients. And I truly believe this is just the very beginning of what we will accomplish. I'm looking forward to sharing more updates and milestones with you as we progress through the year. And I would like to thank you all for joining us today and for your thoughtful questions. Thank you.