Executive Summary / Key Takeaways

• Plinabulin's Differentiated Mechanism: BeyondSpring's lead asset, Plinabulin, is a first-in-class selective immunomodulating microtubule-binding agent (SIMBA) with a dual mechanism, offering both direct anti-cancer benefits and significant reduction in chemotherapy-induced neutropenia (CIN). This unique action, activating GEF-H1 and inducing dendritic cell maturation, positions it as a potential universal add-on to cancer treatments.
• Strategic Pivot to China: Following a U.S. FDA Complete Response Letter for CIN, BeyondSpring has strategically intensified its focus on the Greater China market, leveraging a robust partnership with Hengrui Pharmaceuticals (TICKER:SHA:600276) and strong clinical data in Asian populations for both CIN and non-small cell lung cancer (NSCLC) indications.
• NSCLC Efficacy and Regulatory Momentum: The Phase 3 DUBLIN-3 study demonstrated statistically significant and clinically meaningful overall survival benefits in NSCLC, including an over 80% reduction in Grade 4 neutropenia. This data, published in LANCET Respiratory Medicine, underpins a near-term NDA filing in China, with ongoing investigator-initiated studies exploring Plinabulin's role in overcoming checkpoint inhibitor resistance.
• Asset Optimization and Liquidity: The ongoing divestiture of SEED Therapeutics, a strategic move to reallocate resources, has provided initial cash inflows of $7.35 million in Q2 2025, with an additional $28.07 million expected. This, combined with streamlined operations, is projected to provide sufficient liquidity for the next 12 months, enabling continued development of the core Plinabulin pipeline.
• Competitive Edge in Unmet Needs: BeyondSpring aims to carve out a significant niche by addressing critical unmet needs, such as the "neutropenia vulnerability gap" where current G-CSFs are less effective, and re-sensitizing patients who have failed prior immunotherapies, differentiating itself from larger, more diversified oncology players.

Plinabulin: A Novel Mechanism for Cancer Care

BeyondSpring Inc. (NASDAQ:BYSI) stands as a clinical-stage biopharmaceutical company dedicated to developing innovative cancer therapies. At the heart of its strategy is Plinabulin, a first-in-class selective immunomodulating microtubule-binding agent (SIMBA). This unique molecule is not merely another chemotherapy agent; it operates through a distinct mechanism by binding to tubulin and activating the immune defense protein GEF-H1. This activation leads to the induction of innate and adaptive immunity via dendritic cell (DC) maturation, a critical process for mounting an effective anti-tumor response.

The tangible benefits of Plinabulin's technology are multifaceted. In the context of chemotherapy-induced neutropenia (CIN), Plinabulin offers a complementary mechanism to granulocyte colony-stimulating factors (G-CSFs), which are less effective in the crucial first week post-chemotherapy—a period termed the "neutropenia vulnerability gap" where over 75% of CIN-related complications occur. Plinabulin's rapid action in this early phase provides superior protection, a significant advantage over existing standards of care. For instance, the DUBLIN-3 study demonstrated an over 80% reduction in Grade 4 neutropenia when Plinabulin was combined with docetaxel.

Beyond CIN prevention, Plinabulin exhibits direct anti-cancer activity. Its immune-enhancing properties are being explored to overcome resistance to existing immunotherapies. Recent research, including a human clinical study published in Med (Cell Press) in June 2025, highlighted Plinabulin's ability to induce DC maturation and elicit tumor responses in patients across multiple cancer types who had failed prior immune checkpoint inhibitor (ICI) therapy. This research also identified a potential biomarker, baseline GEF-H1 immune signature, which may enable patient pre-selection and clinical response prediction. This technological differentiation is foundational to BeyondSpring's competitive moat, offering the potential for higher average selling prices, improved margins, and a distinct market position by addressing critical unmet needs that current therapies cannot fully resolve.

Strategic Focus: China Market and Pipeline Expansion

BeyondSpring's strategic trajectory has been significantly shaped by recent regulatory and market developments. Following a Complete Response Letter from the U.S. FDA in November 2021 for Plinabulin in CIN, the company has streamlined operations and pivoted to prioritize near-term value creation, particularly in the Greater China market. This strategic shift leverages the strong clinical data generated in Asian patient populations and a robust partnership with Hengrui Pharmaceuticals (TICKER:SHA:600276).

The collaboration with Hengrui, a leading oncology R&D and commercialization company in China, is a cornerstone of BeyondSpring's commercialization strategy. Under the terms, BeyondSpring's subsidiary, Wanchunbulin, granted Hengrui exclusive commercialization and co-development rights for Plinabulin in Greater China. This partnership, initiated in August 2021, included an upfront payment of approximately $31 million (RMB 200 million) and potential regulatory and sales milestones of up to $171 million. BeyondSpring retains manufacturing rights and 100% of sales proceeds, paying Hengrui a predetermined percentage, while development costs are shared 50/50. This arrangement provides significant commercial synergies, given Hengrui's leading market position with PD-1 inhibitors, docetaxel products, and long-acting G-CSF in China. Plinabulin's recognition as a National Science and Technology Major Project in China and its inclusion in the National Drug Priority Review List further enhance its market access potential, including possible inclusion in the National Insurance System.

In the non-small cell lung cancer (NSCLC) arena, the Phase 3 DUBLIN-3 study of Plinabulin in combination with docetaxel for second- and third-line EGFR wild-type NSCLC patients yielded positive results. The study, which enrolled 559 patients globally, demonstrated statistically significant and clinically meaningful overall survival benefit, progression-free survival (PFS), and objective response rate (ORR) compared to docetaxel alone. These findings were published in LANCET Respiratory Medicine in September 2024, and BeyondSpring is prioritizing an NDA filing in China for this indication. The company is also actively pursuing Plinabulin in immuno-oncology (IO) combinations to address the severe unmet medical need of patients who have progressed on checkpoint inhibitors. Investigator-initiated Phase 2 studies are underway in China for NSCLC (Plinabulin + Keytruda + docetaxel) and extensive-stage small cell lung cancer (ES-SCLC) (Plinabulin + Keytruda + etoposide + platinum), aiming to re-sensitize resistant tumors.

Competitive Landscape and Market Positioning

BeyondSpring operates in the highly competitive oncology market, where it faces formidable rivals such as Bristol-Myers Squibb (BMY), Merck & Co. (MRK), AstraZeneca (AZN), Roche (RHHBY), and Novartis (NVS). These large pharmaceutical companies possess extensive global presences, diversified oncology portfolios, and robust commercialization infrastructures. BeyondSpring, as a clinical-stage company, occupies a more specialized niche, focusing on its lead asset, Plinabulin, and its unique mechanism of action.

In the chemotherapy-induced neutropenia (CIN) market, Plinabulin aims to disrupt the established dominance of G-CSFs. While G-CSFs are the current standard, they leave a "neutropenia vulnerability gap" in the first 10 days post-chemotherapy. BeyondSpring's market research indicates that Plinabulin, in combination with G-CSF, is seen by oncologists as a means to elevate the standard of care, offering superior protection and potentially reducing severe complications like febrile neutropenia and hospitalizations. This differentiation is crucial, as the addressable market for CIN prophylaxis expanded by over 100% with the NCCN guideline changes in March 2021 to include intermediate-risk patients, now encompassing over 70% of chemotherapy patients.

For NSCLC, Plinabulin's DUBLIN-3 data positions it as a potential treatment for second- and third-line patients, a population with limited options beyond older drugs like docetaxel, which carry significant side effects. The company's strategy to combine Plinabulin with checkpoint inhibitors and radiation to re-sensitize patients who have failed prior immunotherapies directly targets a growing unmet need that even large players are striving to address. While BeyondSpring lags its larger competitors in terms of revenue generation and overall market capitalization, its innovative approach and strategic partnerships, particularly with Hengrui in China, allow it to compete effectively in specific therapeutic areas. The company's long patent life for Plinabulin, extending to 2037 in 40 jurisdictions, provides a significant competitive barrier.

Financial Performance and Liquidity

BeyondSpring's financial performance reflects its stage as a clinical-stage biopharmaceutical company, characterized by significant R&D investments and a pre-revenue profile from product sales. For the six months ended June 30, 2025, the company reported a net loss from continuing operations of $4.46 million, an improvement from a $4.73 million loss in the prior-year period. Quarterly net loss from continuing operations for Q2 2025 was $1.88 million, down from $2.65 million in Q2 2024.

Research and development (R&D) expenses for the six months ended June 30, 2025, increased to $1.88 million from $1.55 million in the prior year, primarily due to higher professional service fees for regulatory and CMC activities, and increased Plinabulin combination therapy research. General and administrative (G&A) expenses, however, decreased to $2.68 million for the six months ended June 30, 2025, from $3.15 million in the prior year, mainly due to lower professional service costs for business development and reduced administrative headcount. The company's effective tax rate remains low, with a full valuation allowance against deferred tax assets.

Liquidity is a critical focus for BeyondSpring. Historically, the company has incurred negative cash flows from operations, primarily funding R&D and G&A costs.

As of June 30, 2025, continuing operations held $9.50 million in cash and cash equivalents. A significant recent development is the ongoing divestiture of SEED Therapeutics. In February 2025, the first closing of this sale generated approximately $7.35 million in cash, contributing to $17.20 million in net cash provided by investing activities for the six months ended June 30, 2025. This transaction also resulted in a $6.99 million gain on the sale of subsidiary interests. BeyondSpring anticipates receiving an additional $28.07 million from subsequent tranches of the SEED divestiture, with closings expected by December 15, 2025, and December 15, 2026. Management projects that current financial resources, supplemented by these expected proceeds, will be sufficient to cover operational expenses and capital expenditures for the next 12 months.

Outlook and Risks

BeyondSpring's outlook is defined by its strategic focus on the China market and the continued development of Plinabulin. The company remains hopeful for potential approval of Plinabulin in CIN prevention by the China NMPA, with ongoing positive discussions. The NDA filing for NSCLC in China is a near-term priority, leveraging the strong DUBLIN-3 data. For the U.S. market, a second Phase 3 CIN study will be required, with active discussions underway with the FDA on its design. For NSCLC in the U.S., discussions with the FDA are ongoing regarding the applicability of the DUBLIN-3 data, which was predominantly from Chinese patients.

Key risks include the inherent uncertainties of regulatory approval processes, particularly the need for additional clinical trials in the U.S. for CIN and the ongoing discussions regarding NSCLC data applicability. Funding risk remains pertinent; while current resources are projected to last 12 months, the company will need substantial additional capital for long-term development and commercialization. Global market volatility, driven by inflation, high interest rates, and geopolitical conflicts, could impact the availability and terms of future financing. Furthermore, the company's subsidiary, Wanchunbulin, is subject to PRC government grant commitments until 2033, with potential refund obligations if terms are not met. The ongoing divestiture of SEED, while providing liquidity, will diminish BeyondSpring's controlling power and limit its ability to benefit from SEED's future growth.

Conclusion

BeyondSpring Inc. is at a pivotal juncture, strategically reorienting its focus to capitalize on the unique therapeutic potential of Plinabulin. The company's core investment thesis hinges on Plinabulin's dual mechanism as a first-in-class SIMBA, offering both superior CIN prevention and direct anti-cancer efficacy, particularly in addressing the critical unmet need of checkpoint inhibitor resistance. The strategic pivot towards the Greater China market, bolstered by a robust partnership with Hengrui Pharmaceuticals (TICKER:SHA:600276) and compelling clinical data, positions BeyondSpring for potential near-term commercialization and revenue generation in a significant and growing oncology market.

While the U.S. regulatory pathway presents challenges, necessitating additional clinical studies, the company's disciplined approach to asset management, exemplified by the SEED Therapeutics divestiture, enhances its liquidity and allows for focused investment in its core Plinabulin pipeline. Investors should closely monitor the progress of Plinabulin's regulatory filings in China, the design and initiation of the second U.S. CIN study, and the continued development of its immuno-oncology combinations. BeyondSpring's technological differentiation and strategic market positioning offer a compelling long-term growth narrative, provided it can successfully navigate regulatory hurdles and secure the necessary funding to bring its innovative therapies to patients worldwide.