- Strong growth in net product revenue of 47% y-o-y to reach
$101.8 million for the third quarter of 2024
- Positive China bridging study of KarXT in schizophrenia;
expected regulatory submission in early 2025
- Global Phase 1 data of ZL-1310 (DLL3 ADC) suggests
best-in-class potential in extensive-stage SCLC
- Three product launches in mainland China expected by the end of
2024, and up to four potential regulatory submissions to the NMPA
in the next six months
- Strong balance sheet with a cash position1 of $716.1 million as
of September 30, 2024, compared to $730.0 million as of June 30,
2024
Conference call and webcast today, November 12,
at 8:00 a.m. ET (9:00 p.m. HKT)
Zai Lab Limited (NASDAQ: ZLAB; HKEX: 9688) today announced
financial results for the third quarter of 2024, along with recent
product highlights and corporate updates.
“In the third quarter, we delivered strong commercial results,
maintained financial discipline, and continued to advance our
global pipeline of innovative medicines,” said Dr. Samantha Du,
Founder, Chairperson, and Chief Executive Officer of Zai Lab. “The
launch of VYVGART® has been a great success, and we are
well-positioned to support the ongoing needs of many patients
living with generalized myasthenia gravis (gMG). Our late-stage
pipeline is progressing well. The China bridging study of KarXT for
schizophrenia had positive results for all study endpoints, and we
expect a China submission in early 2025. The FORTITUDE-102 study,
which evaluates bemarituzumab in gastric cancer, has completed
enrollment. Additionally, promising data from our global Phase 1
study of ZL-1310 – a potential best-in-class DLL3-targeted ADC
being developed globally for small cell lung cancer (SCLC) – has
shown preliminary breakthrough antitumor activity. We believe we
are on track to drive substantial value for our business over the
next few years.”
“Our net product revenues in the third quarter grew 47% y-o-y,
driven by the continued strong uptake of VYVGART,” said Josh
Smiley, President and Chief Operating Officer of Zai Lab. “VYVGART
in gMG, is on track to be a blockbuster launch in its first year on
China’s National Reimbursement Drug List (NRDL). The VYVGART
franchise has tremendous potential. In addition to evaluating a
variety of additional indications, we expect to launch the
subcutaneous formulation of VYVGART (VYVGART Hytrulo) for gMG and
chronic inflammatory demyelinating polyneuropathy (CIDP) in the
fourth quarter. Our late-stage programs including bemarituzumab for
gastric cancer and KarXT for schizophrenia present high potential
opportunities that will further drive growth. Meanwhile, we had
significant improvement in net loss, driven by our continued
efforts to improve efficiency and exercise financial discipline. We
are well positioned for future growth and profitability, supported
by our current commercial portfolio and advancing global and
late-stage pipeline.”
1 Cash position includes cash and cash equivalents, current
restricted cash, and short-term investments.
Third-Quarter 2024 Financial Results
- Product revenue, net was $101.8 million in the third
quarter of 2024, compared to $69.2 million for the same period in
2023, representing 47% y-o-y growth, 46% y-o-y growth at constant
exchange rate (CER). This increase was primarily driven by
increased sales for VYVGART and was also supported by increased
sales for ZEJULA® and NUZYRA®.
- VYVGART was $27.3 million in the third quarter of 2024,
compared to $4.9 million for the same period in 2023, driven by
increased sales since its launch in September 2023 and listing on
NRDL for the treatment of gMG effective January 1, 2024.
- ZEJULA was $48.2 million in the third quarter of 2024,
an increase of 16% y-o-y from $41.6 million for the same period in
2023. ZEJULA sales remained strong as it continued to be the
leading PARP inhibitor in hospital sales for ovarian cancer in
mainland China.
- NUZYRA was $10.0 million in the third quarter of 2024,
an increase of 82% y-o-y compared to $5.5 million for the same
period in 2023, driven by the NRDL listings for the IV formulation
of NUZYRA for the treatment of adults with community-acquired
bacterial pneumonia (CABP) and acute bacterial skin and skin
structure infections (ABSSSI) in the first quarter of 2023 and the
oral formulation for these indications in the first quarter of
2024.
- Research and Development (R&D) expenses were $66.0
million in the third quarter of 2024, compared to $58.8 million for
the same period in 2023. This increase was primarily due to
increased upfront and milestone fees for our license and
collaboration agreements, partially offset by decreased clinical
trial expenses and personnel costs as a result of ongoing resource
prioritization and efficiency efforts.
- Selling, General and Administrative expenses were $67.2
million in the third quarter of 2024, compared to $68.6 million for
the same period in 2023. This decrease was primarily driven by
decreased personnel costs as a result of ongoing resource
prioritization and efficiency efforts, partially offset by
increased general selling expenses primarily for VYVGART.
- Loss from operations was $67.9 million in the third
quarter of 2024, $48.2 million when adjusted to exclude non-cash
expenses including depreciation, amortization, and share-based
compensation. A reconciliation of loss from operations (GAAP) to
adjusted loss from operations (non-GAAP) is included at the end of
this release.
- Net loss was $41.7 million in the third quarter of 2024,
or a loss per ordinary share attributable to common stockholders of
$0.04 (or loss per American Deposit Share (ADS) of $0.42), compared
to a net loss of $69.2 million for the same period in 2023, or a
loss per ordinary share of $0.07 (or loss per ADS of $0.71).
- Cash and cash equivalents, short-term investments, and
current restricted cash totaled $716.1 million as of September
30, 2024, compared to $730.0 million as of June 30, 2024.
Corporate Updates
Below are key corporate updates since our last earnings
release:
- Organizational Update: In September 2024, the Company
appointed Prista Charuworn, M.D., as Vice President, Immunology,
Global R&D. Dr. Charuworn is an accomplished gastroenterologist
with extensive experience and leadership in clinical development in
hepatology and immunology. She reports to Rafael Amado, M.D.,
President of Global Research and Development, and is responsible
for leading and advancing the R&D strategy and execution of our
immunology therapeutic area as well as our neuroscience and
infectious disease assets. She previously held key leadership roles
in clinical development at Amgen, AstraZeneca and Gilead.
Recent Pipeline
Highlights
Below are key product updates since our last earnings
release:
Oncology Pipeline
- Global Pipeline – ZL-1310 (DLL3 ADC): In October 2024,
Zai Lab presented data from a Phase 1 study of ZL-1310 in
extensive-stage SCLC (ES-SCLC) after platinum-based therapy. The
data, from the ongoing Part 1a monotherapy dose-escalation portion
of the study, included results from 25 patients across four dose
cohorts (0.8 mg/kg, 1.6mg/kg, 2.0 mg/kg, 2.4 mg/kg). Findings from
this study suggest that ZL-1310 delivers anti-tumor activity across
multiple dose levels with an overall response rate of 74%. It was
well tolerated across all dose levels with the majority of
treatment emergent adverse events being Grade 1 or 2.
- Bemarituzumab (FGFR2b): In October 2024, Zai Lab and
partner Amgen completed patient enrollment for the global Phase 3
FORTITUDE-102 study of bemarituzumab in combination with
chemotherapy and a checkpoint inhibitor in first-line gastric
cancer.
Immunology, Neuroscience, and Infectious Disease
Pipeline
- Efgartigimod (FcRn): In November 2024, China’s National
Medical Products Administration (NMPA) approved the supplemental
Biologics License Application (sBLA) for the subcutaneous
formulation of efgartigimod, under the brand name VYVGART Hytrulo,
for the treatment of adult patients with CIDP. It is the first and
only NMPA-approved treatment for patients with CIDP in China. The
product is to be administered as a single subcutaneous injection
per week (1,000 mg fixed dose) delivered over 30 to 90
seconds.
- Xanomeline and Trospium Chloride (KarXT)
(M1/M4-agonist):
- In October 2024, Zai Lab announced positive topline results
from the Phase 3 bridging study evaluating the safety and efficacy
of KarXT in schizophrenia in China. The study met its primary
endpoint, with KarXT demonstrating a statistically significant and
clinically meaningful 9.2-point reduction in the Positive and
Negative Syndrome Scale (PANSS) total score compared to placebo at
Week 5 (-16.9 KarXT vs. -7.7 placebo, p=0.0014). The study also met
all secondary efficacy endpoints. Zai Lab expects to submit a New
Drug Application to the NMPA for KarXT for the treatment of
schizophrenia in early 2025.
- In October 2024, Zai Lab partner Bristol Myers Squibb (BMS)
announced new topline results from the Phase 3 EMERGENT-4 and
EMERGENT-5 open-label trials evaluating the long-term efficacy,
safety and tolerability of KarXT in adults with schizophrenia over
52 weeks of treatment. In the analysis, KarXT was associated with
continued improvements in symptoms of schizophrenia across all
efficacy measures. KarXT continued to see a lack of weight gain,
and it was not associated with movement disorders or metabolic
changes. In September 2024, BMS announced that the U.S. FDA
approved KarXT, under the brand name COBENFYTM, for the treatment
of adult patients with schizophrenia.
- Global Pipeline – ZL-1503 (IL-13/IL-31): In September
2024, Zai Lab presented pre-clinical data of ZL-1503, an
IL-13/IL-31 bi-specific antibody, at the European Academy of
Dermatology and Venerology Congress (EADV) 2024. The presentation
discussed the potential of ZL-1503 as a novel treatment for
moderate-to-severe atopic dermatitis, as well as other diseases
involving the IL-13 and IL-31 pathways.
Anticipated Major Milestones in
2024 and 2025
Expected Commercial Launches in China by the End of
2024
- XACDURO (SUL-DUR) for the treatment of adult patients
with hospital-acquired bacterial pneumonia and
ventilator-associated bacterial pneumonia (HABP/VABP) caused by
susceptible isolates of Acinetobacter baumannii-calcoaceticus
complex.
- VYVGART Hytrulo (efgartigimod alfa injection
(subcutaneous injection)) as an add on to standard therapy for
the treatment of adult patients with gMG who are anti-acetylcholine
receptor (AChR) antibody positive and for the treatment of adult
patients with CIDP.
- AUGTYRO (repotrectinib, ROS1/TRK) for the treatment of
adult patients with locally advanced or metastatic ROS1+
NSCLC.
Upcoming Potential NMPA Submissions
- Xanomeline and Trospium Chloride (KarXT)
(M1/M4-agonist): NDA submission in schizophrenia in early
2025.
- TTFields (Tumor Treating Fields): Marketing
Authorization Application (MAA) submission in second-line+ NSCLC
following progression on or after platinum-based chemotherapy. Zai
Lab partner Novocure announced that TTFields was approved by the
FDA under the brand name Optune Lua® for the treatment of
metastatic NSCLC in October 2024.
- Tisotumab Vedotin (Tissue Factor ADC): BLA submission in
recurrent or metastatic cervical cancer following progression on or
after chemotherapy.
- Repotrectinib (ROS1/TRK): supplementary NDA submission
in NTRK+ solid tumors.
Expected Clinical Development and Data Readouts in 2024 and
2025
Efgartigimod (FcRn)
- Zai Lab partner argenx to provide topline data from the Phase
2/3 ALKIVIA study evaluating efgartigimod across three myositis
subsets (immune-mediated necrotizing myopathy, anti-synthetase
syndrome, and dermatomyositis) by the end of 2024. Zai Lab to join
the Phase 3 portion of this study in the fourth quarter of
2024.
- Zai Lab to continue to work with argenx to explore the
potential of efgartigimod to treat other IgG-mediated autoimmune
indications by joining several studies in Greater China, including:
- The global registrational studies of efgartigimod alfa
injection given by prefilled syringe in Thyroid Eye Disease (TED)
in the fourth quarter of 2024.
- The global registrational Phase 3 studies in seronegative gMG
and ocular MG in early 2025 aiming to expand the label into broader
MG populations.
- The global registrational Phase 3 study in Sjogren’s disease in
the second half of 2025.
Bemarituzumab (FGFR2b)
- Zai Lab partner Amgen to provide a data readout from the Phase
3 FORTITUDE-101 study of bemarituzumab combined with chemotherapy
versus chemotherapy alone in first-line gastric cancer. We are
participating in the study in Greater China.
TTFields
- Zai Lab partner Novocure to provide a topline data readout from
the Phase 3 PANOVA-3 clinical trial in locally advanced pancreatic
cancer in the fourth quarter of 2024. We are participating in the
study in Greater China.
ZL-1310 (DLL3 ADC)
- Zai Lab to enroll patients into dose expansion in the ongoing
global Phase 1 study for ZL-1310 monotherapy for second-line+
ES-SCLC in 2024, and initiate dose escalation for the first-line
setting, in combination with atezolizumab and platinum-based
chemotherapy in 2025.
- Zai Lab to initiate a global Phase 1 study to explore ZL-1310
in other neuroendocrine tumors in 2025.
ZL-6301 (ROR1 ADC)
- Zai Lab to initiate a global Phase 1 study in solid tumors in
2025.
ZL-1503 (IL-13/IL-31)
- Zai Lab to submit an Investigational New Drug Application to
the FDA in 2025.
Conference Call and Webcast
Information
Zai Lab will host a live conference call and webcast today,
November 12, 2024, at 8:00 a.m. ET (9:00 p.m. HKT). Listeners may
access the live webcast by visiting the Company’s website at
http://ir.zailaboratory.com. Participants must register in advance
of the conference call.
Details are as follows:
Registration Link:
https://register.vevent.com/register/BIe3071c05888e4577aa901f5de0f00669
All participants must use the link provided above to complete
the online registration process in advance of the conference call.
Dial-in details will be in the confirmation email which the
participant will receive upon registering.
A replay will be available shortly after the call and can be
accessed by visiting the Company’s website.
About Zai Lab
Zai Lab Limited (NASDAQ: ZLAB; HKEX: 9688) is an innovative,
research-based, commercial-stage biopharmaceutical company based in
China and the United States. We are focused on discovering,
developing, and commercializing innovative products that address
medical conditions with significant unmet needs in the areas of
oncology, immunology, neuroscience, and infectious disease. Our
goal is to leverage our competencies and resources to positively
impact human health in China and worldwide.
For additional information about Zai Lab, please visit
www.zailaboratory.com or follow us at
www.twitter.com/ZaiLab_Global.
Non-GAAP Measures
In addition to results presented in accordance with GAAP, we
disclose growth rates that have been adjusted to exclude the impact
of changes due to the translation of foreign currencies into U.S.
dollars. We have also presented a measure of adjusted loss from
operations that adjusts GAAP loss from operations to exclude the
impact of certain non-cash expenses including depreciation,
amortization, and share-based compensation. These adjusted growth
rates and adjusted loss from operations are non-GAAP measures. We
believe that these non-GAAP measures are important for an
understanding of the performance of our business operations and
financial results and provide investors with an additional
perspective on trends. Although we believe the non-GAAP financial
measures enhance investors’ understanding of our business and
performance, these non-GAAP financial measures should not be
considered an exclusive alternative to accompanying GAAP financial
measures.
Zai Lab Forward-Looking Statements
This press release contains forward-looking statements relating
to our strategy and plans; potential of and expectations for our
business and pipeline programs; our goals, objectives, and
priorities and our expectations under our growth strategy
(including our expectations regarding our commercial products and
launches, clinical stage products, revenue growth, profitability,
and cash flow); clinical development programs and related clinical
trials; clinical trial data, data readouts, and presentations;
risks and uncertainties associated with drug development and
commercialization; regulatory discussions, submissions, filings,
and approvals and the timing thereof; the potential benefits,
safety, and efficacy of our products and product candidates and
those of our collaboration partners; the anticipated benefits and
potential of investments, collaborations, and business development
activities; our future financial and operating results; and
financial guidance, including with respect to our planned sources
and uses of cash and our expected path to profitability. All
statements, other than statements of historical fact, included in
this press release are forward-looking statements, and can be
identified by words such as “aim,” “anticipate,” “believe,”
“could,” “estimate,” “expect,” “forecast,” “goal,” “intend,” “may,”
“plan,” “possible,” “potential,” “will,” “would,” and other similar
expressions. Such statements constitute forward-looking statements
within the meaning of the Private Securities Litigation Reform Act
of 1995. Forward-looking statements are not guarantees or
assurances of future performance. Forward-looking statements are
based on our expectations and assumptions as of the date of this
press release and are subject to inherent uncertainties, risks, and
changes in circumstances that may differ materially from those
contemplated by the forward-looking statements. We may not actually
achieve the plans, carry out the intentions, or meet the
expectations or projections disclosed in our forward-looking
statements, and you should not place undue reliance on these
forward-looking statements. Actual results may differ materially
from those indicated by forward-looking statements as a result of
various important factors, including but not limited to (1) our
ability to successfully commercialize and generate revenue from our
approved products; (2) our ability to obtain funding for our
operations and business initiatives; (3) the results of our
clinical and pre-clinical development of our product candidates;
(4) the content and timing of decisions made by the relevant
regulatory authorities regarding regulatory approvals of our
product candidates; (5) risks related to doing business in China;
and (6) other factors identified in our most recent annual and
quarterly reports and in other reports we have filed with the U.S.
Securities and Exchange Commission (SEC). We anticipate that
subsequent events and developments will cause our expectations and
assumptions to change, and we undertake no obligation to update or
revise any forward-looking statements, whether as a result of new
information, future events, or otherwise, except as may be required
by law. These forward-looking statements should not be relied upon
as representing our views as of any date subsequent to the date of
this press release.
Our SEC filings can be found on our website at www.zailaboratory.com and on the SEC’s website at
www.SEC.gov.
Zai Lab Limited Unaudited
Condensed Consolidated Balance Sheets (in thousands of U.S.
dollars ($), except for number of shares and per share
data)
September 30,
2024
December 31,
2023
Assets
Current assets
Cash and cash equivalents
616,086
790,151
Restricted cash, current
100,000
—
Short-term investments
—
16,300
Accounts receivable (net of allowance for
credit losses of $14 and $17 as of September 30, 2024 and December
31, 2023, respectively)
49,970
59,199
Notes receivable
19,278
6,134
Inventories, net
39,548
44,827
Prepayments and other current assets
35,667
22,995
Total current assets
860,549
939,606
Restricted cash, non-current
1,118
1,113
Long term investments
3,153
9,220
Prepayments for equipment
32
111
Property and equipment, net
50,765
53,734
Operating lease right-of-use assets
12,833
14,844
Land use rights, net
3,012
3,069
Intangible assets, net
51,669
13,389
Long-term deposits
975
1,209
Value added tax recoverable
1,240
—
Total assets
985,346
1,036,295
Liabilities and shareholders’
equity
Current liabilities
Accounts payable
120,652
112,991
Current operating lease liabilities
6,585
7,104
Short-term debt
112,994
—
Other current liabilities
46,084
82,972
Total current liabilities
286,315
203,067
Deferred income
24,924
28,738
Non-current operating lease
liabilities
6,113
8,047
Other non-current liabilities
325
325
Total liabilities
317,677
240,177
Commitments and contingencies
Shareholders’ equity
Ordinary shares (par value of $0.000006
per share; 5,000,000,000 shares authorized; 989,268,370 and
977,151,270 shares issued as of September 30, 2024 and December 31,
2023, respectively; 984,356,170 and 972,239,070 shares outstanding
as of September 30, 2024 and December 31, 2023, respectively)
6
6
Additional paid-in capital
3,031,628
2,975,302
Accumulated deficit
(2,371,399)
(2,195,980)
Accumulated other comprehensive income
28,270
37,626
Treasury Stock (at cost, 4,912,200 shares
as of both September 30, 2024 and December 31, 2023)
(20,836)
(20,836)
Total shareholders’ equity
667,669
796,118
Total liabilities and shareholders’
equity
985,346
1,036,295
Zai Lab Limited Unaudited
Condensed Consolidated Statements of Operations (in
thousands of $, except for number of shares and per share
data)
Three Months Ended September
30,
Nine Months Ended September
30,
2024
2023
2024
2023
Revenues
Product revenue, net
101,847
69,228
289,102
200,889
Collaboration revenue
418
—
816
—
Total revenues
102,265
69,228
289,918
200,889
Expenses
Cost of product revenue
(36,569)
(25,479)
(105,336)
(70,579)
Cost of collaboration revenue
(348)
—
(433)
—
Research and development
(65,982)
(58,767)
(182,252)
(183,920)
Selling, general, and administrative
(67,219)
(68,552)
(216,123)
(198,982)
Gain on sale of intellectual property
—
—
—
10,000
Loss from operations
(67,853)
(83,570)
(214,226)
(242,592)
Interest income
9,029
9,172
28,017
29,493
Interest expense
(745)
—
(1,350)
—
Foreign currency gains (losses)
14,457
4,852
8,281
(26,315)
Other income, net
3,441
394
3,859
223
Loss before income tax
(41,671)
(69,152)
(175,419)
(239,191)
Income tax expense
—
—
—
—
Net loss
(41,671)
(69,152)
(175,419)
(239,191)
Loss per share - basic and diluted
(0.04)
(0.07)
(0.18)
(0.25)
Weighted-average shares used in
calculating net loss per ordinary share - basic and diluted
981,687,390
968,767,730
976,941,030
965,060,570
Zai Lab Limited Unaudited
Condensed Consolidated Statements of Comprehensive Loss (in
thousands of $)
Three Months Ended September
30,
Nine Months Ended September
30,
2024
2023
2024
2023
Net loss
(41,671)
(69,152)
(175,419)
(239,191)
Other comprehensive income, net of tax of
nil:
Foreign currency translation
adjustments
(14,503)
(4,228)
(9,356)
22,267
Comprehensive loss
(56,174)
(73,380)
(184,775)
(216,924)
Zai Lab Limited Non-GAAP
Measures ($ in thousands)
Growth on a Constant Exchange
Rate (CER) Basis
Three Months Ended September
30,
Year over Year % Growth
Nine Months Ended September 30,
Year over Year % Growth
2024
2023
As reported
At CER*
2024
2023
As reported
At CER*
Product revenue, net
101,847
69,228
47%
46%
289,102
200,889
44%
45%
Loss from operations
(67,853)
(83,570)
(19)%
(20)%
(214,226)
(242,592)
(12)%
(11)%
* The growth rates at CER were calculated assuming the same
foreign currency exchange rates were in effect for the current and
prior year periods.
Reconciliation of Loss from Operations (GAAP) to Adjusted
Loss from Operations (Non-GAAP)
Three Months Ended September
30,
Nine Months Ended September
30,
2024
2023
2024
2023
GAAP loss from operations
(67,853)
(83,570)
(214,226)
(242,592)
Plus: Depreciation and amortization
expenses
2,871
1,918
8,824
6,570
Plus: Share-based compensation
16,795
21,992
53,413
59,164
Adjusted loss from operations
(48,187)
(59,660)
(151,989)
(176,858)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20241112084615/en/
Investor Relations: Christine Chiou / Lina Zhang +1 (917)
886-6929 / +86 136 8257 6943 christine.chiou1@zailaboratory.com /
lina.zhang@zailaboratory.com Media: Shaun Maccoun / Xiaoyu
Chen +1 (415) 317-7255 / +86 185 0015 5011
shaun.maccoun@zailaboratory.com / xiaoyu.chen@zailaboratory.com
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