BeiGene is investing $800 million on a New Jersey manufacturing facility opening Wednesday at a former Bristol Myers Squibb site.
BeiGene's New Facility in Hopewell, New Jersey
The Western New Jersey town of Hopewell was caught off-guard in 2016 when long-time denizen Bristol-Myers Squibb said it planned to move out of a 1.1 million square foot manufacturing and research site, taking more than 1,100 jobs and $6 million a year tax revenue with it. Starting in 2019, Hopewell attracted three new U.S.-based biotech firms — PTC Therapeutics in that year, PassageBio in 2020, and Genoa Bio in 2021, but that still didn’t fill all the vacant space. It finally scored big with a relatively little-known, cancer-focused newcomer in 2021: BeiGene, which agreed to purchase one third of the space in a park that now goes by “Princeton West Innovation Campus.”
Led by entrepreneur John Oyler, a 56-year-old American with extensive experience in Greater China who now lives in the U.S., BeiGene agreed to invest $800 million, one of the largest pharmaceutical projects in New Jersey in recent years. One of New Jersey’s charms: It’s home to some of the largest suppliers of cancer drugs in the U.S. including Johnson & Johnson, Bristol-Meyers Squibb, and Merck, who all have headquarters there. There are also plenty of nearby colleges including Princeton, Rutgers, the College of New Jersey, Rider University, and Thomas Edison State University. “There is tremendous talent,” CEO John Oyler told Forbes in a Zoom interview from California. BeiGene picked Hopewell after looking at more than 160 other sites starting in 2020. Now three years after the deal was first signed and two years after New Jersey Governor Phil Murphy presided over its groundbreaking, BeiGene’s new facility is opening on Wednesday, July 23.
The Hopewell investment is part of an ongoing international push by BeiGene, which boasts a market capitalization of $16 billion. The company already has 10,000 employees in 40 countries. “It might take a village to raise a child, but to fight cancer, it takes huge, huge global collaboration,” Oyler said. Cancer is a global killer, taking the life of more than 10 million people around the world annually, and spending to fight the dread disease is poised to rise in the coming years. BeiGene’s ethos is splashed across its website: “Cancer Has No Borders. Neither Do We.” The market for cancer drugs was $155.7 billion in 2022 but is expected to increase to $272 billion by 2030, according to a forecast by Precedence Research.
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Oyler has bet his fortune on fighting cancer. The largest individual shareholder in BeiGene, Oyler’s net worth peaked at $1.8 billion in 2021. He’s now worth $1 billion, as investors wait for BeiGene to deliver consistent profits. The New Jersey manufacturing facility – adding to its current capacity in China and outsourced production elsewhere – will give it more room to serve U.S. demand for its growing lineup of cancer-fighting drugs, but until the company steadily makes money, investors could face a choppy road.
Oyler credits his interest in science to a teacher at Mount Lebanon High School in his hometown of Pittsburgh, Pennsylvania. “I was really blessed that I went to a public high school with a progressive view that let you take electives,” he said. The inspirational educator, Ada Hutchison, died at age 94 in 2018. “You could frame experiments and go run them, and she’d give you guidance," Oyler said. “That got me hooked on science for life, and I loved learning.”
Economic decline in America’s steel hub in the 1970s and 1980s gave young Oyler an appreciation of entrepreneurism. “It wasn’t a good time to be a parent in Pittsburgh or a working person in Pittsburgh because the industry was falling apart,” recalled the 56-year-old. “It was a good time to be a native kid because the sports teams were doing great, (but) a lot of people were losing jobs. The first three friends I ever made all moved because their father was losing their job.” His takeaway: “If you can create a good job, that’s something magical. I remember laying in my bed dreaming: Can’t you just have a company where you have all of these friends, and don’t have family stress and move away?”
Oyler’s interest in science helped him gain entry at MIT; his time in the Boston area was also fused with entrepreneurism. “I got there, and I needed to work. I’m from a family that didn’t believe in debt, wasn’t well off, and was scared to death we were going into debt at MIT,” Oyler recalled. “So I worked at the coffee stand in the morning selling coffee, and I worked at the tennis bubble sweeping the floor.”
“Eventually a friend said, ‘Why don’t we do some business stuff together?’ We started up some entrepreneurial things to pay for school, which was selling things that college kids need all over Boston at, like, 13 universities. We sold carpets and bookshelves and flowers — anything. It was really successful. We made a lot of money. We also learned a lot. Every challenge you can imagine – people stealing from you that work for you,” he said. "It was this brilliant learning experience. So, I decided in school I wanted to be an entrepreneur. It’s what I wanted to do. I still loved science.”
After graduating from MIT with an engineering degree, Oyler joined McKinsey in Washington, D.C. but was curious about working abroad. The consultancy offered him work in Hong Kong, Buenos Aires, or Sydney. He says his boss at the time needled him into picking Hong Kong by spreading a rumor that he didn’t have the courage to go to Asia. “The guy completely manipulated me,” Oyler said. “I had no particular interest in Hong Kong but I wasn’t going to let anyone say I didn’t have the guts. The next thing I know, I’m on a plane to Hong Kong” on a flight that would change his life.
Oyler witnessed first-hand the rough and tumble of China’s early days of market reforms and its huge potential. He later returned to the U.S. and enrolled in an MBA program at Stanford. With new business smarts, he started and then sold two companies in the U.S. and China. Telephia, a consumer telecom research firm Oyler founded in 1997, was sold to The Nielsen Co. for $449 million in 2007. Oyler's next success came with drug discovery outsourcing company BioDuro, which he founded in 2005 and sold to PPD Inc. for $77 million in 2010. BioDuro was particularly important, he said, because he observed how many small biotech companies are often underfunded and easily fail. Flush with cash from the sales, he talked to an expert at Memorial Sloan Kettering Cancer Center in New York for advice about cancer drug development; he also discussed his idea with Xiaodong Wang, a professor at China’s elite Tsinghua University, a member of the National Academy of Sciences in the U.S. and a former Howard Hughes Medical Institute investigator. Wang went on to co-found BeiGene with Oyler, who invested $10 million of his own money and was joined by a few angel investors as well as investment from Merck in putting up early money. Baker Brothers Advisors, the U.S. investment firm whose leaders Julian and Felix Baker are worth $2.8 billion apiece, became investors in October 2014.
According to its 2018 Hong Kong listing prospectus, BeiGene “started as a research and development company in Beijing in 2010 focusing on developing best-in-class oncology therapeutics.” Nowadays, with Oyler back in the U.S., the company seems intent to distance itself from its Chinese roots. BeiGene “was not incorporated in China and has never been headquartered in China,” said spokesman Kyle Blankenship, adding that the wording “isn't meant to imply that we were founded in China.” The business is “incorporated in the Cayman Islands, and BeiGene has never had a formal headquarters in China or otherwise.”
BeiGene got a boost when it went public on the Nasdaq in 2016; then listed in Hong Kong in 2018. A year later it received backing from U.S. cancer-drug giant Amgen, which paid $2.7 billion for a 20.5% stake at $174.85 a share, a 36% premium over its stock price at that time. BeiGene received cash for the newly issued shares but also a portfolio of cancer drugs to distribute and co-develop with Amgen in China, now the world’s No. 2 pharmaceuticals market. BeiGene’s interest in U.S. expansion and New Jersey led the town of Hopewell to do some deeper thinking about China’s success in luring manufacturers. “During the construction planning process, we dimensionalized the importance of speed of approvals and construction for BeiGene by pointing to the example of how quickly Tesla had built its new factory in China,” said former mayor Kevin Kuchinski, who worked with BeiGene to come to his town of about 2,000. “We made a conscious choice to build from the strong base of existing assets, including small-scale biologics manufacturing facility assets (Bristol-Myers Squibb) had previously used, a stand-alone water treatment plant on-site, and central utilities. Like also tends to attract like,” Kuchinski said, referring to the common business activities of the two companies. Local, county, and state agencies “cut through bureaucracy” to speed the project.
To be sure, New Jersey isn’t completely new turf to BeiGene. It already has eight drug trials underway in New Jersey. Another four are planned this year, across 12 sites. It expects to expand that total once the new investment is completed, a move that will also benefit New Jersey’s community cancer centers by creating more revenue and a business for them, Oyler said. The company also has a 120-person business office in Ridgefield Park, New Jersey, that opened in August 2018. (It also has offices in Fulton, Maryland; San Mateo and Emeryville, California; and Cambridge, Massachusetts.)
BeiGene’s biggest success to date has been its drugs Brukinsa and tislelizumab, as well as revenue from licensed products from Amgen and from its manufacturing collaboration with Novartis. Brukinsa sales have benefitted from U.S. regulatory approval for its use as a treatment for patients with chronic lymphocytic leukemia and small lymphocytic lymphoma and received good reviews for its push into treatments for blood cancer. Altogether these streams helped to lift revenue by 68% to $751 million in the first quarter of 2024; its net loss fell to $251 million during the same time period, down from $348 million a year earlier. BeiGene’s prospects coming out of the Covid-19 pandemic were better than many firms because of its geographically spread-out operations, said Oyler, who grew up in Pittsburgh where he was a big hockey fan. He moved back to the U.S. during the pandemic. Today he reckons, the company is about halfway to its cost goals, with a lot more of the world into which it can expand. “I have a very peripatetic life,” splitting time on the U.S. east and west coasts, along with Asia and Europe, he said. “That's the nature of supporting a business that's growing globally,” he added. “We've always built this team that's global. When you have headquarters that everyone comes into in one physical location, by definition, everyone else is a second-class citizen that isn't at that location in your company because they're out of the loop. So we very early on tried to build an organization that was embracing remote work and remote tools for a management team that could be distributed around the world,” he said. “If you want to make affordable medicine to fight cancer, by definition, you have to be global. You have to be global for your clinical trials, or they'll cost too much. You need to be global when you commercialize, because the vast majority of the cost is up front. If you're not commercializing across the whole world, you're not able to amortize the cost through enough patients,” Oyler said. “I think that the tech industry really has worked in a much more distributed fashion for years. Their challenges are easier — it's not as complex as our industry. It's much harder with much more cross-functional expertise to make a medicine properly than software.”
As with software products, up-front drug costs are huge, he said. Addressing BeiGene’s finances, China Merchants Securities (HK) estimates that BeiGene will have $2.5 billion in cash on hand at the end of 2024. Revenue will increase to $4 billion in 2025 from $2.4 billion in 2023; its expected full-year loss during that period will fall from $882 million to $383 million, the brokerage said. What about complex U.S.-China politics? “There's really been absolutely no direct impact on the operations that we have at all,” he said. “One of the great things about fighting cancer is it's something everyone's trying to do and everyone's sympathetic with, despite all the noise” in international relations. As for the BIOSECURE Act pending in U.S. Congress that would restrict federal money for biotech equipment or services from going to certain Chinese entities and businesses under the control of a “foreign adversary,” BeiGene said it “does not meet any of the criteria.”
Someone else who is optimistic about BeiGene is Hopewell’s Kuchinski. He expects BeiGene to contribute as much tax revenue by 2031 from its 42 acres to the town as the larger Bristol-Myers Squibb campus did several years ago. That success, if achieved, would mark something of a mission accomplished by both.
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