Photo: BeiGene
ESG has become a yardstick for investors to measure the value of enterprises.
"The more information ESG discloses, the clearer investors will see, which will help to effectively improve resource allocation." On April 20, 2022, Fang Xinghai, vice chairman of the China Securities Regulatory Commission, said at the "Building Sustainable Development ESG" meeting of the Boao Forum for Asia Annual Conference that the current CSRC requires the disclosure of ESG-related information, mainly based on the principle of voluntariness, "We have formulated standards to enforce disclosure, which is the next step to do." ”
ESG, the disclosure system for environmental, social and governance. In recent years, as the capital market has paid more attention to ESG, companies are also actively responding to the dual expectations of supervision and market.
As an innovative pharmaceutical company, it benefits patients with multi-pipeline new drugs, builds production lines with the concept of environmental protection and energy saving, and promotes corporate governance with a global vision, which are all in line with the core connotation of ESG.
On April 26, BeiGene (NASDAQ: BGNE; HONG KONG STOCK EXCHANGE: 06160; SSE: 688235) released its 2021 ESG Global Report, with the theme of "Changing the Healing Future". Compared with the past, the 2021 BeiGene ESG report shows the company's achievements and contributions in the five key focus areas of advancing global health, empowering employees, sustainable innovation, supporting communities, and responsible operations.
In the view of John V. Oyler, co-founder, chairman and CEO of BeiGene, companies in the biomedical industry have an obligation to contribute to solving the inequalities that still exist in the world today.
BeiGene is accelerating its business model transformation to develop medicines more efficiently and give patients early access to innovative therapies. "We have a responsibility to contribute more to patients and society while minimizing the negative impact of our business operations on the environment," Ou Said said. ”
ESG disclosures have become a trend
In April 2022, the China Securities Regulatory Commission (CSRC) issued the newly revised Guidelines for the Management of Investor Relations of Listed Companies (2022) (hereinafter referred to as the Guidelines). The Guidelines make it clear that for the first time, "environmental, social and governance information (ESG) for companies" has been included in the communication of investor relations management, which has aroused widespread concern in the industry.
Relevant people said that although the current ESG information is still in the stage of voluntary release by enterprises, ESG disclosure has become a trend, followed by further refinement and quantification of standards.
From the release of the Draft for Comments in 2021 to its recent promulgation, the Guidelines not only effectively enhance the public's attention to ESG from the perspective of emphasizing the protection of the rights and interests of small and medium-sized investors, but also convey the signals, trends and future layout of the mainland for sustainable development to domestic and foreign capital markets.
In the past, only financial indicators were used to measure a company, and the dimension was relatively single, because the financial data reflected the past investment, operation and revenue of the enterprise. ESG builds another dimension of information that looks at enterprises. The corporate ESG disclosure system presents the core framework for corporate sustainable development and has become the mainstream evaluation system for the non-financial performance of enterprises.
Industry insiders believe that the lack of ESG information will affect the stakeholders of the enterprise to make correct value judgments and investment decisions; and the disclosure of substantive information about ESG by enterprises will help stakeholders such as enterprises, governments and investors to make decisions conducive to value creation.
Because of the importance of ESG, capital markets in many parts of the world have put forward expectations for ESG disclosure.
In March 2022, the U.S. Securities and Exchange Commission (SEC) released the Draft Climate Data Disclosure Standards for Listed Companies (the Draft). The Draft points out that in the future, when submitting prospectuses and releasing financial reports such as annual reports, U.S. listed companies will need to announce the company's carbon emission level, potential climate change problems, the impact of the company's business model and economic conditions.
In 2016, HKEx issued ESG reporting guidelines, gradually increasing the intensity of ESG letters from "encouraging" to "explaining non-compliance".
Based on the standards stipulated by major exchanges around the world, as the world's first biotechnology company listed on the NASDAQ, Hong Kong Stock Exchange and Shanghai Stock Exchange Science and Technology Innovation Board, BeiGene has prepared the 2021 ESG report with reference to the "Sustainable Development Reporting Standards" and other standards issued by the Global Reporting Initiative (GRI), which follows the requirements of relevant ESG reports such as the Hong Kong Stock Exchange and the Shanghai Stock Exchange.
Photo: BeiGene
From the business level, the biggest responsibility of innovative pharmaceutical companies - to develop accessible and affordable new drugs for patients - is itself one of the important contents of social and corporate governance in ESG. As a leading biotechnology company and global leader, BeiGene emphasized in the ESG report that one of the company's major visions is to bring more accessible and affordable high-quality innovative drugs to more patients around the world.
Specifically, in 2021, BeiGene's R&D pipeline contains about 50 commercial products and drug candidates in development, more than 50 preclinical research projects, the product pipeline covers 80% of the world's cancer species (by incidence), and more than 90 clinical trials are being conducted in 45 countries and regions around the world.
In addition, about half of BeiGene's more than 50 preclinical research projects in 2021 have the potential to be "first-in-class" or "best-in-class" and are committed to meeting the treatment needs of more unmet patients.
As a pharmaceutical company, the importance and particularity of ESG is that the stakeholders of pharmaceutical companies are more diverse and need to meet the expectations of all parties. For example, the research and development of new drugs needs to solve unmet clinical needs; in the production process, it is necessary to achieve environmental protection, energy saving, and low carbon; the communication channels with patients are also diversified, supporting the public welfare activities of associations and communities related to cancer research, and pharmaceutical companies cannot be absent; the company's internal governance, the development path of employee diversification, these need to be presented in the form of ESG disclosure, and on the basis of financial performance, multi-dimensional and three-dimensional capacity building needs to be realized.
Continue to innovate and develop to narrow the global "health and equity" gap
As a biotechnology company with a deep globalization strategy, the ESG concept plays an important role in BeiGene's global governance.
Advancing global health is an important part of BeiGene's ESG report. From discovering new therapies to scaling up commercialization, BeiGene is working to improve global access to medicines to close the global health equity gap.
To that end, BeiGene has laid out an extensive pipeline that includes many preclinical drug candidates with "first-in-class" or "best-in-class" potential.
At the same time, the company's global clinical development model has basically achieved "decrocro" and established the ability of independent clinical development. The company conducts clinical trials in multiple countries and regions around the world, recruiting patients faster and helping to reduce the time and cost of clinical trials by one-third.
From the perspective of commercialization model, the company hopes that innovative drugs will not only cover developed markets, but also markets in developing regions, and determine product pricing based on criteria for expanding patient accessibility.
The above strategy not only enriches the ESG framework, but also brings considerable benefits to the company, further enhancing the ability to continue operations.
On April 28, BeiGene released its 2021 annual report on the Science and Technology Innovation Board. The annual report shows that commercial products contribute major growth momentum to the company's revenue. In 2021, BeiGene's product revenue reached 4.09 billion yuan, an increase of 92.9% year-on-year.
Compared with the same industry, as of April 15, 2022, BeiGene's commercial product portfolio has increased to as many as 16 models, ranking among the top in the domestic biotechnology industry.
Among them, the company's self-developed BTK inhibitor Baiyueze (zebutinib) has a very bright growth performance in 2021. According to the annual report, in 2021, the cumulative sales of Baiyueze globally were 1.406 billion yuan, an increase of 391.4% year-on-year.
From the perspective of global market performance, in 2021, Baiyueze's sales revenue in the United States increased significantly, thanks to the approval of multiple indications in the United States and the expansion of market demand, the revenue of the product in the United States reached 746 million yuan, a year-on-year increase of 492.1%. In China, Baiyueze's sales revenue reached 652 million yuan, an increase of 307.5% year-on-year.
BeiGene's rapid growth and expansion have laid a solid foundation for future sustainable development.
Some industry observers believe that the field of new drugs is hierarchical: a small number of companies have research and development capabilities, coupled with the continuous blessing of capital, they hope to follow the standards of the US FDA, target the global market, try to go to sea, and make gains in the global market.
However, this strategy is not suitable for most pharmaceutical companies, and most companies need to focus on China's unmet clinical needs, rather than going to sea.
On this level, BeiGene clearly belongs to the "minority". The actual performance in overseas markets is eye-catching, and the company's R&D capabilities and product advantages are also constantly attracting the favor of multinational pharmaceutical companies, bringing large cooperation income to the company. In January and December 2021, BeiGene reached a global development and commercialization partnership with Novartis on Beizean and TIGIT inhibitor osperizumab, respectively, with the combined potential total transaction value of the two record global collaborations exceeding $5 billion.
Global, diverse as the core
A patient charity event called "Light Up the Night," which raises donations to support the Leukemia and Lymphoma Society's research on the treatment of hematological tumors, received the participation and support of more than 250 employees of a company in 2021 — teams from 20 regions that raised more than $35,000 for "Light Up the Night," hoping to bring warmth and hope to cancer patients.
The employees are from BeiGene. From employees to companies, BeiGene is committed to elevating patient voice and enabling global healthcare conversations to revolve around patient-centered issues. In June 2021, BeiGene hosted the inaugural Global Rights Forum, inviting delegates from 20 patient rights organizations around the world to explore better ways to support patient communities. In the same year, BeiGene established a patient rights committee composed of patient rights organizations and patients to better meet the needs of patients.
In China, BeiGene, in cooperation with 14 domestic patient organizations and 7 non-profit institutions, supported the development of 13 patient education manuals, carried out 25 related courses, and supported the publication of about 80 patient education articles and 1200 papers in the whole year of 2021. According to statistics, more than 4 million patients with different types of solid tumors, hematological tumors and rare diseases participated in the above patient support programs, further improving the understanding of diseases and treatment methods.
Behind these activities is BeiGene's goal to be a leading corporate citizen with patients at its core, with courage, innovation and regulation to ensure that business operations meet the needs of diverse stakeholders, including patients, employees, investors, communities, and especially the environment.
In order to achieve energy conservation and emission reduction, in 2021, BeiGene will further improve its greenhouse gas emissions inventory to comprehensively cover the global emissions of Scope 1 (direct combustion of fossil fuels) and Scope 2 (production electricity) generated by BeiGene's own and operating institutions.
By the end of 2021, BeiGene will have three global production sites, located in Suzhou, China, Guangzhou, China, and New Jersey (under construction). At the operational level, BeiGene strives to reduce the environmental impact of its self-operated production sites by investing in production sites of high global standards, reducing greenhouse gas emissions, reducing water use and waste.
In fact, as a pioneer of innovative drugs going overseas, the global operating model allows BeiGene to recruit the world's top medical and commercial professionals, thus enabling it to achieve borderless collaboration across borders, which is a large part of the company's success.
To support the needs of its stakeholders, BeiGene employs people in all regions of the world: 7,052 employees in Asia Pacific by 2021, 1,260 and 213 in North America and 213 in Europe.
Under the global operating model, the company fosters a culture of mutual respect and understanding, with colleagues from different backgrounds and geographies working towards a common goal. Back in 2020, BeiGene established the Inclusion, Diversity, Equity and Awareness (IDEA) Committee to provide a forum for employees from different countries, ethnicities and backgrounds to discuss diversity, equity, inclusion and belonging. The collision of different ideas and perspectives can inspire innovation and improve the performance of the company's results, so in 2021, BeiGene has also established a special vice president of diversity, equity and inclusion (DEI).
Thousands of miles, not a day's work. Can BeiGene stand out from many start-up Biotechs and gradually grow into a global biotechnology company, in addition to the team's persistence and focus in the field of drug innovation and research and development, as well as the global development vision and operation system, through the promotion of ESG-related projects, to promote a "win-win" situation with all stakeholders around the world.
With its global layout and strong R&D strength, BeiGene has taken the lead in the field of biotechnology, and the company's efforts in ESG have been recognized by international authorities.
In 2021, in the latest ESG rating released by MSCI, BeiGene was upgraded to the "BBB" level, which is at the leading level of the domestic biotechnology industry. In addition, BeiGene is also included in the FTSE Developed Markets ESG Low Carbon Select Index and the FTSE Asia (excluding Japan) ESG Low Carbon Select Index, with significant sustainable development strength.
The brilliant financial performance, superimposed on the information disclosure of ESG, BeiGene has built a sustainable development capability in a multi-dimensional and three-dimensional way, and also clarified the future investment value.