Zai Lab Limited Q4 FY2025 earnings call

• Dr. Samantha Du mentioned Satellab is important in evolution, global oncology immunology pipeline is reaching scale and maturity with multiple programs in clinic, China business provides stability and leverage for global R&D with full year revenue growth 15% despite challenging environment. 2026 priorities include execution and preparation with pipeline catalysts like clinical data for JOSIG and first-in-human data for IL-13, IL-31 receptor bispecific program. - Rafael Amado walked through R&D pipeline progress: Zosie initiated global registration phase three study in second-line and third-line small cell lung cancer, advanced rapidly, ZL6201 received US IND clearance, ZL1222 progressing through IND enabling studies, ZL1311 first globally-owned TCE with IAD plan by year end, ZL1503 global phase 1, 1B study enrolling well. Key late-stage regional programs: F-cortisumab expanding across autoimmune indications, WITACISEP on track for interim analysis, AllegroBART partner Viridian to report top-line data. Local oncology portfolio: TIFDAC expected to be approved in China first half of 2026, OptumPax FDA approval for locally advanced pancreatic cancer an important milestone. - Josh Smiley framed business progress in 2025 across market access, portfolio optimization, business development, divested non-core assets, entered targeted collaborations. 2026 focus on maintaining existing business strength and stability while preparing for growth opportunities including building VivGuard franchise, launching CARXT in schizophrenia, advancing late-stage assets.

Fourth quarter revenues increased 17% year over year to $127 million, and full year revenues grew 15% to $460 million. Vivgard had fourth quarter revenues affected by channel dynamics related to NRDL renewal and hospital purchasing patterns; Zejula had a strong fourth quarter driven by first-line BRCA-positive new patient starts; CARXT is a significant near-term growth opportunity with commercial launch expected in second quarter of 2026. Full year revenue of $460.2 million was 15% year-over-year growth. R&D expenses for full year declined 6% driven by lower personnel compensation costs, and increased in fourth quarter due to fast progression of global clinical trials. SG&A expenses decreased 12% and 7% year-over-year for fourth quarter and full year mainly due to strategic resource optimization. Adjusted loss from operations improved 19% for full year to $229.4 million and 25% when adjusted to exclude non-cash expenses.

• 2026 priorities are focused on execution and preparation with several pipeline catalysts. Expecting meaningful pipeline catalysts like clinical data for JOSIG and first-in-human data for IL-13, IL-31 receptor bispecific program. 2026 is a transition year with underlying demand growth, but mindful of dynamics like Vivicar IV price adjustment and NADL rebate dynamics. Not providing full-year guidance at this time but will share more specifics later in the year as clarity is gained. - For 2026, expect good growth opportunities for VivGuard with volume gains in second half continuing, Zach Doro to be a good driver, important launches like CoBEMFI in second quarter and TIVDAC later in the year. Expenses: SG&A has modest investments for launches, R&D relatively in line with past years with big focus on global portfolio but capacity available as late phase opportunities come offline in China.

Q: Can you provide any color on how we should be thinking about revenues and expenses for 2026? And on the global pipeline for Zosi, can you remind us of the implications of the intracranial activity in patients with brain mets, and how does this impact the opportunity and positioning of the drug?

A: Josh started with 2026 revenue expectations, Yajing added dynamics like Vivicar IV price adjustment. Rafael talked about Zosie's intracranial activity with 80% response rates in patients with untreated brain metastasis, preventing recurrences and importance of presenting data in first half using stringent Raynaud criteria.

Q: Can you elaborate a little bit more on the U.S.-China development model and on Zosie's data in neuroendocrine?

A: Josh and Rafael elaborated on U.S.-China development model's efficiency in moving programs to phase three. Rafael talked about Zosie's data in neuroendocrine with study in second line, initial data to be presented in first half, and regulatory discussions on single-arm study.

Q: Does the company believe that they could achieve break-even or profitability by the end of the year? And what is the expectation for completion of enrollment and the timing of reading out the primary endpoint and response rate in order to file for Zosie?

A: Yajing said corporate profitability is a goal driven by top-line growth and investment in global programs. Rafael said Zosie study started in December, plan to have 75% of patients enrolled by end of year, finish enrollment at end of first quarter next year, do analysis and file, hoping for approval in 2028.

Q: Could you talk about your strategy to grow VivGuard, specifically how to increase cycles per patient?

A: Josh talked about VivGuard's strategy to move cycles per patient to three, leveraging guidelines, affordability initiatives, seeing progress with average cycles improving over 50% from 2024, expecting to get majority of acute phase patients to three or more cycles this year.

Q: On the global second, third line DLL3 study, can you remind us what the ultimate regional breakdown of sites is going to be, and on Zosie's first-line small cell lung cancer trial design and NEC strategy?

A: Rafael talked about enrollment distribution with 30% from U.S., 30% from China, rest from Europe. Rafael talked about Zosie's first-line small cell lung cancer trial with data to be presented in second half, desire to be centerpiece ADC in combinations, and NEC study in second line with initial data to be presented in first half and regulatory discussions on path.

Q: Regarding Zosie's phase three trial for second line small cell lung cancer and first line plans, and on CAR-XT and business development?

A: Rafael talked about Zosie phase three trial control arm and first line plan to start phase three study this year. Josh talked about CAR-XT commercial launch in second quarter 2026, focus on educating physicians this year, and business development looking at opportunities in China and making targeted deals.

Q: Question around Zosie's phase three trial for second line small cell lung cancer and first line plans?

A: Rafael answered about phase three trial control arm and first line data plans, saying patients can use Tarlatamab post-progression equally in both arms and first line study to start by end of year