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Why BeiGene Is Soaring 13.8% Today

By Todd Campbell – Jan 18, 2018 at 1:39PM

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The company's wallet is about to get a bit thicker.

What happened

After pricing an offering of its American depositary shares (ADSs) at $101, BeiGene (BGNE 2.49%) is rallying 13.8% at 1:00 p.m. EST.

So what

BeiGene has been a hot stock since last summer when it teamed up with Celgene Corp. (CELG)

Chinese coins on top of a red envelope containing Chinese money.


As part of that deal, BeiGene received rights to market Celgene's drugs in China for the next 10 years and Celgene got ex-Asia rights to BeiGene's PD-1 drug, tislelizumab, formerly BGB-A317. Celgene also acquired a 5.9% equity stake in BeiGene.

Today, BeiGene announced its priced a follow-on public offering of 7,425,750 ADSs, each representing 13 of its ordinary shares, at $101.00 per ADS. At that price, BeiGene expects to collect gross proceeds before fees of $750 million. Investors can also take advantage of an overallotment option representing an additional 495,050 ADSs.

Now what

It's busy days for BeiGene. The company has a slate of trials ongoing and planned for its PD-1 inhibitor, BTK inhibitor, and PARP inhibitor, including various combination studies. Altogether, BeiGene's working on 40 clinical trials involving over 2,000 patients, including nine planned studies of tislelizumab.

The flurry of activity means BeiGene's expenses are climbing, so news of the offering shouldn't be surprising. The money it raises via the ADS sale should put it in an excellent position to commercialize Celgene's drugs and launch its own drugs in China, including tislelizumab and its BTK-inhibitor, zanubrutinib, both of which BeiGene hopes to file for approval of this year in China.

Todd Campbell owns shares of Celgene. His clients may have positions in the companies mentioned. The Motley Fool owns shares of and recommends Celgene. The Motley Fool has a disclosure policy.

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