BYSI

Business Context and Reporting Period

BeyondSpring Inc. (BYSI) is a clinical-stage global biopharmaceutical company incorporated in the Cayman Islands. The company focuses on developing innovative therapies for high unmet medical needs, primarily through its lead asset, Plinabulin, a first-in-class small molecule being developed as an anti-cancer agent and for the prevention of chemotherapy-induced neutropenia (CIN). The company also holds an equity stake in SEED Therapeutics Inc., a subsidiary utilizing a Targeted Protein Degradation (TPD) platform. This Form 10-K covers the fiscal year ended December 31, 2024.

Key Financial Metrics

Note: The company reported no revenue from product sales in 2024. Discontinued operations relate to SEED Therapeutics, which was reclassified as held-for-sale in late 2024.

Material Changes vs. Prior Period

• Reduced Operating Loss: Net loss from continuing operations decreased by approximately 37% to $8.9 million in 2024 from $14.0 million in 2023, driven by a 64% reduction in Research and Development (R&D) expenses.
• R&D Expense Decline: R&D expenses dropped from $7.3 million to $2.6 million, primarily due to the completion of major clinical studies (DUBLIN-3, PROTECTIVE-1, and PROTECTIVE-2) and lower personnel and professional service costs.
• Discontinued Operations: SEED Therapeutics operations were reclassified as discontinued operations following a board-approved divestiture plan. While SEED generated $2.0 million in revenue from collaboration agreements, it contributed a net loss of $7.8 million.
• Shareholder Structure: In February 2025, the company completed the first closing of a sale of SEED equity interests, receiving approximately $7.35 million in cash proceeds.

Guidance, Outlook, and Risks

Management Commentary and Outlook

Management plans to file a New Drug Application (NDA) with China's National Medical Products Administration (NMPA) for Plinabulin in combination with docetaxel for non-small cell lung cancer (NSCLC) as soon as possible, following positive Phase 3 results published in September 2024. The company intends to seek co-development and commercialization partners for the U.S. and global markets outside of Greater China, where it has an exclusive agreement with Jiangsu Hengrui Pharmaceuticals. The company anticipates continuing to incur significant operating losses and negative cash flows for the foreseeable future.

Key Risks and Contingencies

• Liquidity: The company had $2.9 million in cash as of December 31, 2024. Management estimates current resources will fund operations for the next 12 months but will require additional financing for long-term development and commercialization.
• Regulatory Hurdles: The FDA issued a Complete Response Letter (CRL) in November 2021 regarding the NDA for Plinabulin for CIN prevention, citing insufficient robustness of the single registrational trial. The company withdrew the NDA from the NMPA in March 2023. Future approval for NSCLC is not guaranteed and may require additional trials.
• Supply Chain: The company relies on BASF SE as the sole supplier of a stabilizing agent (Kolliphor HS15) for Plinabulin. Disruption of this supply would require reformulation and regulatory re-evaluation.
• Internal Controls: The company previously identified two material weaknesses in internal controls over financial reporting in 2023, which management states have been remediated as of December 31, 2024.

Investor Verification Checklist

• Cash Runway: Verify the sufficiency of the $2.9 million cash balance against projected burn rates for the upcoming 12 months and the timeline for securing additional financing.
• NDA Filing Status: Confirm the specific timeline and regulatory strategy for the planned NDA filing with the NMPA for the NSCLC indication.
• SEED Divestiture: Monitor the progress of the remaining two closings of the SEED equity sale (expected by Dec 2025 and Dec 2026) and the impact on consolidated financial reporting.
• Supply Chain Resilience: Assess the risk mitigation strategies regarding the sole-source dependency on BASF SE for the Plinabulin formulation.
• Internal Controls: Review the effectiveness of the remediation measures implemented to address the previously disclosed material weaknesses in financial reporting.