Morgan Stanley: BeOne Medicines’ third-quarter revenue beats expectations; solid-tumor pipeline models raised substantially

What drove the third-quarter beat and growth?

BeOne Medicines reported total revenue of 1.89 billion dollars for the third quarter of 2026, 8% above the market consensus; diluted GAAP EPS was 3.28 dollars, also above Morgan Stanley’s estimate of 1.76 dollars.
Global sales of core product Brukinsa were 1.391 billion dollars for the quarter, up 34% year over year; U.S. sales exceeded 1 billion dollars for the first time, reaching 1.005 billion dollars, up 36% year over year. About 50 million dollars of this came from order timing and an additional shipping day, while the firm also noted that leading share of new-patient starts and longer treatment duration supported underlying growth.

Morgan Stanley raised its 2026 total revenue forecast to 7.043 billion dollars, 4.3% above the market consensus; however, the midpoint of the company’s full-year revenue guidance is 6.95 billion dollars, still 1.3% below the firm’s forecast. Thus, the strong quarterly results did not fully eliminate the gap between full-year guidance and the firm’s model.
The firm raised its 2026 GAAP diluted EPS forecast from 7.56 dollars to 30.68 dollars, mainly assuming the release of about 2.3 billion dollars of deferred tax asset valuation allowance in the fourth quarter; this one-time tax benefit is excluded from the non-GAAP measure. Over the same period, its non-GAAP EPS forecast rose from 13.97 dollars to 16.57 dollars, better reflecting the firm’s upward revision to operating earnings.

Morgan Stanley expanded its solid-tumor pipeline coverage from 4 projects and 5 indications to 5 projects and 8 indications, and raised its 2036 unadjusted sales forecast from 2.4 billion dollars to 9.6 billion dollars and its risk-adjusted forecast from 1.2 billion dollars to 4.2 billion dollars. These are changes to the long-term model, not current sales revenue.
The largest source of the upward revision is the CDK4 inhibitor BGB-43395: using a 40% probability of success, the firm estimates 2036 unadjusted sales of about 5.7 billion dollars in the U.S. and overseas markets, and about 2.3 billion dollars on a risk-adjusted basis; the model assumes launches in the U.S. in 2030 and overseas in 2031. Early signals supporting this assumption include an objective response rate of about 70% in a first-line breast cancer trial and no observed grade 3 or higher neutropenia at the recommended dose; the Phase III study has expanded to 1200 participants, with the aim of accelerating readouts.

Management attributed implied fourth-quarter revenue that is roughly flat to down sequentially to normal seasonality and the approximately 50 million dollars of order-timing benefit in the third quarter, rather than weakening demand; meanwhile, Morgan Stanley expects rising Medicare Part D manufacturer liability to turn the modest net pricing benefit in 2026 into a flat to slightly negative effect in 2027.
Commercial products also face pressure: Xgeva is already facing biosimilar competition, so Morgan Stanley lowered its revenue forecasts for 2027 to 2028, and noted that Xgeva and Kyprolis may face Medicare price-negotiation risks after 2026. In the pipeline, the expected timing of the accelerated approval filing for BGB-16673 was delayed from the second half of 2026 to mid-2027, and the firm accordingly shifted its U.S. launch forecast from 2027 to 2028.