The company's Sonrotoclax is the first newly approved BCL-2 inhibitor in the U.S. in nearly a decade, giving BeOne a potential new hit beyond its Zanubrutinib blood cancer therapy

image credit: Bamboo Works

Key Takeaways:

  • BeOne Medicines' newly approved Sonrotoclax could leverage the company's large patient base for its Zanubrutinib blood cancer treatment
  • The company recently raised its full-year revenue guidance to between 43.6 billion yuan and 45.2 billion yuan, while forecasting a gross margin in the high-80% range

For innovative drugmakers with relatively limited portfolios, the success of a single blockbuster therapy is often a key driver toward profitability. But when one product dominates for too long, investors may also begin to question the long-term stability of the company's business, worried about overdependence on a single revenue source.

BeOne Medicines Ltd. (NASDAQ:ONC) (688235.SH; 06160.HK) formerly known as BeiGene, got a nice diversification shot in the arm in that regard last week, with the announcement that its internally developed next-generation highly selective BCL-2 inhibitor, Sonrotoclax, received accelerated approval in the U.S. The decision by the U.S. Food and Drug Administration (FDA) marks an important step in helping the company build a more comprehensive hematologic oncology portfolio.

According to BeOne's announcement, the U.S. approved Sonrotoclax to treat adults with relapsed or refractory (R/R) mantle cell lymphoma (MCL) who have previously received at least two lines of systemic therapy, including a Bruton's tyrosine kinase (BTK) inhibitor. The approval is the first for a new BCL-2 inhibitor in the U.S. in nearly a decade, the company said.

Sonrotoclax was previously approved in China this January for the treatment of R/R MCL, as well as for adults with chronic lymphocytic leukemia (CLL)/small lymphocytic lymphoma (SLL) who have previously received at least one systemic therapy, including a BTK inhibitor. The approvals mean BeOne has completed its BCL-2 rollout across the Chinese and U.S. markets within just six months.

Equally important, BCL-2 complements BeOne's flagship BTK inhibitor, Zanubrutinib, in that both are used to treat hematologic malignancies. Patients treated with BTK inhibitors over the long term often eventually develop drug resistance. The BCL-2 pathway lies downstream of BTK resistance mechanisms, making Sonrotoclax potentially complementary to Zanubrutinib. That means Sonrotoclax could leverage BeOne's large patient base for Zanubrutinib, boosting its physician and patient stickiness for the company's therapies.

Despite those positive implications, market response to the latest U.S. approval was hardly a booster for BeOne's stock. Between May 14 and May 18, the company's Hong Kong-listed shares fell by a cumulative 6.8%, largely driven by weakness for innovative drug stocks and the broader market as well. The Hang Seng Index also moved lower, while the Hang Seng Innovative Drug Index fell 6.5% over that time, reflecting weak overall sector sentiment.

What's more, Sonrotoclax's positive clinical data and the likelihood for FDA approval were already widely anticipated and probably priced into the stock. In line with the old adage, many investors apparently decided to "sell on the-news."

Another profitable quarter

Short-term share volatility aside, BeOne's financials are currently at their strongest point in the company's history. The company's revenue rose 31% year-on-year to 10.54 billion yuan ($1.55 billion) in the first quarter, while it swung to a net profit of 1.61 billion yuan from a loss a year earlier, according to its latest financials released this month. The results extended the company's positive momentum after it achieved its first full-year profitability in 2025.

The latest results showed that product revenue accounted for 98% of BeOne's total in the first quarter, rising 29.3% year-on-year to 10.3 billion yuan. Within that, Zanubrutinib sales made up about three-quarters of the total, rising 33.5% to 7.6 billion yuan. From a geographic perspective, the U.S. remained Zanubrutinib's primary growth engine, with first-quarter sales in the market rising 30.8% to 5.28 billion yuan, accounting for nearly 70% of the drug's global total. The drug's European sales posted even stronger growth, up 51.4% to 1.27 billion yuan. Meanwhile, the company's other products also maintained solid momentum. Global sales of its PD-1 antibody Tislelizumab reached 1.43 billion yuan in the quarter, up 14.8%, while sales of products from licensed from U.S. peer Amgen (AMGN.US) totaled 989 million yuan.

The strong first-quarter performance led BeOne to raise its 2026 financial guidance. The company now expects its revenue this year to range between 43.6 billion yuan and 45.2 billion yuan, while its gross margin is expected to remain in the high-80% range. Its adjusted operating profit for the year is expected to reach between 10 billion yuan and 10.6 billion yuan.

Beyond its internally developed pipeline, BeOne is also expanding its portfolio through licensing agreements with outside partners. In one of the latest of those, the company signed an exclusive agreement with Huahui Health last month giving it global rights to HH160 (BON-110), a novel trispecific antibody targeting PD-1, VEGF-A and CTLA-4. The deal suggests that, taking advantage of its strong cash flow, BeOne is using this type of licensing deal to rapidly expand into next-generation immunotherapy targets.

BeOne currently trades at a price-to-earnings (P/E) ratio of about 66 times, significantly higher than the 46 times for domestic peer Hengrui Pharmaceuticals (600276.SH; 1276.HK). That seems to reflect stronger investor expectations for the company's global platform capabilities and the long-term growth potential of its hematologic oncology portfolio centered around Zanubrutinib and Sonrotoclax. Whether such a lofty valuation is sustainable over the longer term will largely depend on whether Zanubrutinib can keep up its current momentum, or even exceed strong expectations for the therapy, and whether Sonrotoclax can quickly ramp up its sales following the recent approvals in China and the U.S.

To subscribe to Bamboo Works weekly free newsletter, click here

Benzinga Disclaimer: This article is from an unpaid external contributor. It does not represent Benzinga’s reporting and has not been edited for content or accuracy.