Zai Lab Limited (ZLAB) Earnings

Management highlights

• SAI Live has a fully integrated R&D engine, pipeline expanding, global assets generating data, lead asset in global pivotal stage. Leveraging AI and data-driven approaches. Presented new data for Josie at AACR, announced global collaborations. Expect to submit first global BLA to FDA in late 2027. Building global clinical programs including ZL1503 in atopic dermatitis. • R&D engine spans discovery to global registrational development, embedding AI in R&D. Josie showed strong efficacy in small cell lung cancer, SOCI in neuroendocrine carcinomas. DL6201, ZL1311 in pipeline. Submitted marketing authorization application for tumor-treating fields in pancreatic cancer. • First quarter performance affected by seasonality and product-specific dynamics. Working on stabilizing Sejula, VivGuard has stable share with double-digit volume growth. Zac Doro's supply constraints. Commercial catalysts include CAR XT launch, potential TIVDAC approval, and late-stage pipeline growth. Applying AI to sharpen commercial execution.

Guidance

• Expect total product revenue to improve sequentially over next nine months but near-term pressure for 2026 four-year total product revenues with return to growth in 2027. • Expect to submit first global BLA to FDA in late 2027. • Anticipate potential regulatory approval for TIVDAC this year. • Upcoming phase three readouts in new indications for VivGuard add potential upside.

Segment performance

First quarter total product revenue declined 6% year-over-year to $99.6 million, driven by lower VivGuard sales, partially offset by continued growth from Zactura and NuZyra. Sejula's performance was impacted by shift in hospital utilization patterns and competitive pressure. VivGuard had double-digit volume growth but 12% price discount. Zac Doro's performance constrained by supply. CAR XT launches in second quarter, potential regulatory approval for TIVDAC this year, and positive Phase III readouts for Cova-Testacept in IGAN and AllegraBART in thyroid eye disease add growth opportunities.

Analyst Q&A

• Q: On the Zosie collaborations, evaluating the combinations with DLL3 T cell engagers, how do these facilitate longer-term strategy? And are there other combinations and collaborations that make sense to explore? And second question on commercial business in China can give us a sense for how to think about revenues over the course of the year.

  A: Rafael answered about Zosie collaborations, saying combination aims for better efficacy, durability, and survival, testing in various settings. Yajing answered about commercial business in China, saying revenue expected to see sequential growth in next nine months but short-term pressure for 2026 four-year revenue with return to growth in 2027.

• Q: For upcoming data readout for IL-13 and 31, what is the expectation for data? And how do you expect the data set in healthy volunteers to de-risk the asset? And when do we expect data from moderate to severe atopic dermatitis patients? Second question is that for data set in frontline spousal lung cancer in the second half, what is the expectation for that? And also what's good data, how do you pick the go-for regimen in terms of double it versus triple it.

  A: Rafael answered, saying healthy volunteers data will be useful for safety, pharmacokinetics, etc., expecting to have data by end of year for atopic dermatitis. For frontline spousal lung cancer, expecting higher response rates and longer PFS than current control.

• Q: With recent positive data for povitagicept and IGAN, what are the plans to submit in regional China? And just remind us, is there going to be any bridging work required?

  A: Raphael answered, saying will discuss with CDE regulatory requirements for filing, and bridging study not expected as patients from China were included in the study.

• Q: About ZL1503, the bispecific antibody. So it seems like data is going to come in the second half of this year. But so there's a lot of bispecific antibody out there in AD. So we'd like to know what's your base assumption market differentiation for this drug and also your strategy there. Are you planning to run a phase two trial or are you potentially going to.

  A: Raphael answered about differentiation, saying long-term dosing important, expecting meaningful decrease in pruritus and skin pain, and plan to do phase two study. Josh added about competitive class and differentiation factors.

• Q: On Zolci. We noticed that Amgen has initiated Phase 1 study for telanumab plus Zolci within and without PD-L1 in small cell lung cancer. So, could you share a bit more about your thoughts on potential dose levels you're going to explore, particularly considering for telolimab, FDA has actually has a black box in their label, and what are the potential dose levels you're going to be exploring for Zolci and also for telolimab? And also, have you considered to test a sequential use of those two drugs, or instead you're going to be more focusing on administrate those two drugs together to patients? And second question regarding the F-GAR Tish mod in China. Could you please comment on the evolving landscape, given that now Ramagen's teletastrocept has been also enrolled into NRDL? Particularly in the first quarter, have you seen any of the change to the market dynamics?

  A: Rafael answered about Zosie, saying study enrolling now, dose levels include Q3 weekly regimen with fixed Tarlatamab dose and rapid dose escalation with Zosie up to 1.6 mixture kit, and drugs given in fast sequence. Josh answered about Vivgard, saying seeing double-digit volume increases in Q1, with 15% of GMG patients getting biologic therapy and no measurable impact from tele in Q1, focusing on getting patients on biologic therapy.