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Here's Why BeiGene Stock Rose 21.7% in November

Cory Renauer, The Motley Fool
Updated

What happened

Shares of Beigene (NASDAQ: BGNE), an oncology-focused biotech out of China, rose 21.7% in November, according to data from S&P Global Market Intelligence. Investors looking forward to sales of two drugs under review in China helped the stock regain some of October's losses.

So what

Beigene markets Celgene's (NASDAQ: CELG) therapies in China, including Revlimid, which is on pace to generate $9.7 billion in total sales this year. The China Food and Drug Administration (CFDA) is still working through a huge backlog and didn't approve Revlimid to treat newly diagnosed multiple myeloma patients until earlier this year. Beigene reported third-quarter Revlimid revenue that was 22% higher than the previous quarter, suggesting the treatment is gaining steam in the enormous Chinese market.

A man in a suit appears to fly, with the help of a chalk illustration of a jetpack on his back. Next to him is a blue line sloping upward.
A man in a suit appears to fly, with the help of a chalk illustration of a jetpack on his back. Next to him is a blue line sloping upward.

Image source: Getty Images.

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Last month, investors were also encouraged by priority reviews that the CFDA granted for two new drug applications that Beigene submitted earlier this year. Zanubrutinib is an oral leukemia candidate similar to megablockbuster Imbruvica, and it could become a new treatment option for mantle cell lymphoma patients early next year.

The CFDA is also racing through the review of an application for tislelizumab. This is a PD-1 inhibitor similar to Keytruda that could become a new treatment option for advanced-stage Hodgkin's lymphoma patients.

Now what

If both treatments launch successfully in 2019, Beigene can probably start making ends meet without another capital raise. The company finished September with a whopping $2.1 billion in cash and short-term investments after losing $400 million during the first nine months of the year.

Next year, we'll also find out if zanubrutinib beat Imbruvica during an ongoing head-to-head study with newly diagnosed leukemia patients. AbbVie (NYSE: ABBV) and Johnson & Johnson (NYSE: JNJ) share rights to Imbruvica, and combined sales of the drug will probably pass $10 billion by 2020. If Beigene's treatment can outperform the market leader, Beigene shares could rocket upward next year.

More From The Motley Fool

Cory Renauer owns shares of Celgene and Johnson & Johnson. The Motley Fool owns shares of and recommends Celgene. The Motley Fool owns shares of Johnson & Johnson and has the following options: short January 2019 $140 calls on Johnson & Johnson. The Motley Fool has a disclosure policy.