Zai Lab Announces First Quarter 2023 Financial Results and Corporate Updates
- Total product revenue of
$62.8 millionfor the first quarter of 2023, representing a 36% increase y-o-y; ZEJULA® achieved 44% y-o-y growth
- Expansion of Zai Lab’s lung cancer franchise and global oncology pipeline with a next generation antibody-drug conjugate (ADC) program
- Strong balance sheet with a cash position of
$931.4 millionas of March 31, 2023, compared to $1,009.3 millionas of December 31, 2022
- Company to host conference call and webcast on
May 10, 2023, at 8:00 a.m. ET
“Our first quarter results and progress continue to demonstrate Zai Lab’s potential global best-in-class portfolio and track record of execution, despite challenges from China’s re-opening at the beginning of the year,” said Dr.
“Recently, we expanded our lung cancer franchise and enriched our global oncology pipeline with a next generation DLL3 ADC program, ZL-1310,” said
“I look forward to leading Zai into its next transformational stage of growth, productivity, and global opportunities. To better support me and help meet the strategic and operational needs of our business during this next stage of growth, we are happy to announce that we have promoted
“I am very excited about what is in store for us in the next few years that positions
“With respect to our 2023 strategic priorities, we have made progress toward the Biologics License Application (BLA) approval of efgartigimod for generalized myasthenia gravis (gMG) and the BLA submission for subcutaneous (SC) efgartigimod for gMG in
Recent Product Highlights and Corporate Updates
We continued to increase access to our commercial products, including through increased sales for ZEJULA® (niraparib), new NRDL listings for QINLOCK® (ripretinib) and NUZYRA® (omadacycline), and increased supplemental insurance listings for Optune:
- Sales growth for ZEJULA: Net product revenue for ZEJULA continued to increase in the first quarter of 2023, growing 44.2% compared to the first quarter of 2022. We believe ZEJULA remains on track to become the leader in its asset class for ovarian cancer in
Chinastarting this year.
- The National Reimbursement Drug List (NRDL) implementation: The updated NRDL released by China’s
National Healthcare Security Administration(NHSA) officially took effect on March 1, 2023. It has been updated to include both QINLOCK and NUZYRA.
- Supplemental insurance plan coverage (as of
March 31, 2023): Optune was listed in 96 regional customized commercial health insurance plans guided by provincial or municipal governments (or supplemental insurance plans), up from 87 as of December 31, 2022and 37 as of March 31, 2021.
Product Candidate Developments
We continued to advance our product candidates through our research and development and commercial operations, including the following developments with respect to our clinical trials and regulatory approvals:
- TIVDAK® (tisotumab vedotin, ADC):
April 2023, Zai Labpartner Seagen Inc. (Seagen) presented the interim analysis for the Phase 2 innovaTV 207 study in head and neck cancer at the 2023 American Association for Cancer Research(AACR) Annual Meeting. At data cutoff ( November 28, 2022), confirmed that the objective response rate was 40% (95% confidence interval: 16.3, 67.7), with 1 complete response and 5 partial responses. The safety profile was generally consistent with that observed across TIVDAK monotherapy clinical studies.
February 2023, Seagen completed global target patient enrollment for the Phase 3 confirmatory innovaTV 301 study in second- or third-line recurrent or metastatic (r/m) cervical cancer, with a potential topline data readout by year-end 2023. Zai Labis participating in the ongoing extension study in mainland China, Hong Kong, Macauand Taiwan(collectively, Greater China).
- KRAZATI® (adagrasib, KRASG12C):
Zai Labpartner Mirati Therapeutics, Inc. (Mirati) announced the inclusion of adagrasib as the only KRAS inhibitor in the National Comprehensive Cancer Network (NCCN) guidelines for Central Nervous System Cancers for patients with KRASG12C -mutated non-small cell lung cancer (NSCLC) with central nervous system (CNS) metastases and for KRASG12C-mutation positive pancreatic adenocarcinoma cancer patients.
April 2023, Mirati presented updated clinical data for adagrasib as a targeted treatment for pancreatic ductal adenocarcinoma (PDAC), biliary tract cancer (BTC), and other solid tumors harboring a KRASG12C mutation at the American Society of Clinical Oncology (ASCO) Plenaryseries. Data was concurrently published in the Journal of Clinical Oncology.
- Bemarituzumab (FGFR2b): In
March 2023, Zai Labobtained Clinical Trial Application (CTA) approval for the Phase 3 FORTITUDE-101 study of bemarituzumab plus chemotherapy, versus placebo plus chemotherapy, in first-line gastric cancer with FGFR2b overexpression.
- Odronextamab (CD20xCD3): In
March 2023, Zai Labcompleted enrollment in Chinafor the registrational global ELM-2 Phase 2 trial in B-Cell Non-Hodgkin Lymphoma.
- ZL-2313 (BLU-945, EGFR): In
April 2023, Zai Labpartner Blueprint Medicines Corporation (Blueprint) presented novel real-world data showing first-line osimertinib had worse outcomes in EGFR L858R+ vs. ex19del+ NSCLC at the 2023 AACR Annual Meeting. Data also demonstrated additive effects of ZL-2313 with osimertinib in preclinical models of tumor progression, reinforcing the clinical need addressed by the SYMPHONY study in first-line EGFR L858R+ NSCLC.
- ZL-1211 (claudin18.2, global rights): In
April 2023, Zai Labpresented new data including a translational and biomarker data analysis from its internal oncology discovery program ZL-1211 at the 2023 AACR Annual Meeting.
Autoimmune Disorders, Infectious Diseases and Neuroscience
- Sulbactam-Durlobactam (SUL-DUR,
Asia Pacificrights): In April 2023, Zai Labpartner Entasis Therapeutics Inc.(Entasis), a wholly owned subsidiary of Innoviva, announced that the FDA’s Antimicrobial Drugs Advisory Committee(AMDAC) unanimously voted 12-0 in support of approval of its New Drug Application (NDA) for SUL-DUR based on a favorable benefit-risk assessment for the treatment of adults with hospital-acquired bacterial pneumonia and ventilator-associated bacterial pneumonia caused by susceptible strains of Acinetobacter baumannii-calcoaceticus complex (Acinetobacter). Zai Labparticipated in the global Phase 3 registrational ATTACK trial in Greater China, and China’s National Medical Products Administration(NMPA) accepted the Company’s NDA in February 2023.
- KarXT (xanomeline-trospium, M1/M4-preferring muscarinic acetylcholine receptor): In
March 2023, Zai Labpartner Karuna Therapeutics, Inc. (Karuna) announced positive results from the Phase 3 EMERGENT-3 trial of KarXT in schizophrenia. The trial met its primary endpoint, with KarXT demonstrating a statistically significant and clinically meaningful 8.4-point reduction in Positive and Negative Syndrome Scale (PANSS) total score compared to placebo (-20.6 KarXT vs. -12.2 placebo; p<0.0001) at Week 5 (Cohen’s d effect size of 0.60). Consistent with prior trials, KarXT demonstrated an early and sustained statistically significant reduction of symptoms from Week 2 (p<0.05) through the end of the trial as assessed by PANSS total score.
- Business development: In
April 2023, Zai Labentered into a strategic partnership and global license agreement with MediLink Therapeutics. Through this collaboration, the Company expanded its lung cancer franchise and global oncology pipeline with a next-generation DLL3 ADC Program, ZL-1310. DLL3 is an inhibitor of the Notch ligand that is overexpressed in small cell lung cancer and neuroendocrine tumors. ZL-1310 has demonstrated an encouraging pre-clinical profile. ZL-1310 is progressing to the clinical stage, and Zai Labplans to focus on advancing its global development.
- Organizational update:
Josh Smileyhas been promoted to the role of President and Chief Operating Officer, effective April 1, 2023. Mr. Smileyjoined the Company as our Chief Operating Officer in August 2022. He is responsible for our corporate strategy and for overseeing our commercial, manufacturing, business development, finance, human resources, information technology, and corporate affairs functions. Christine Chioujoined the Company in May 2023as Senior Vice President, Head of Investor Relations. Ms. Chioubrings more than 20 years of industry experience across Investor Relations, equity research, and sales and market research. Prior to joining Zai Lab, she was at Incyte Corporation from November 2019to April 2023where she was most recently, the Head of Investor Relations and at Allergan (now part of AbbVie Inc.) from May 2018to October 2019where she was the Director of Investor Relations.
- 2023 Investor Day:
Zai Labwill host an Investor Day in New Yorkon Tuesday, June 20, 2023.
Anticipated Major Milestones in 2023
ZEJULA® (niraparib, PARP)
Zai Labto present the final overall survival (OS) analysis of the Phase 3 NORA study in Chinese patients.
Tumor Treating Fields or TTFields
Zai Labpartner NovoCure Limited (NovoCure) to present the results of the pivotal LUNAR clinical study in NSCLC for the first time at the 2023 ASCO Annual Meeting. The LUNAR data will be presented on Tuesday, June 6at 11:09 a.m. CDTin Hall D1 as a late-breaking abstract during ASCO’s metastatic, non-small cell lung cancer session. Zai Labparticipated in the study in Greater China.
- NovoCure to provide a topline data readout from the global pivotal INNOVATE-3 clinical study testing the efficacy of TTFields together with paclitaxel in platinum-resistant ovarian cancer in the second half of 2023.
TIVDAK® (tisotumab vedotin, ADC)
- Seagen to provide a clinical data update for the Phase 1b/2 innovaTV 205 study in first-line+ r/m cervical cancer in the second half of 2023.
KRAZATI® (adagrasib, KRASG12C)
Zai Labpartner Mirati to provide a clinical data update for the global Phase 2 KRYSTAL-7 study of adagrasib in combination with pembrolizumab in first-line KRASG12C-mutated NSCLC in the second half of 2023. Zai Labis participating in the study in Greater China.
- Mirati to provide update on multi-pronged development approach in first-line KRASG12C-mutated NSCLC in the second half of 2023.
- Mirati to submit a supplemental New Drug Application (sNDA) for Accelerated Approval to the FDA in third-line+ KRASG12C-mutated advanced colorectal cancer (CRC) by year-end 2023.
Zai Labto join the global Phase 3 FORTITUDE-101 study in first-line gastric cancer in Chinain mid-2023. Zai Labto join the global Phase 3 FORTITUDE-102 study in first-line gastric cancer in China.
Zai Labpartner Regeneron Pharmaceuticals, Inc. (Regeneron) to initiate confirmatory studies in follicular lymphoma (FL) and diffuse large B-cell lymphoma (DLBCL) including in earlier lines in the second quarter of 2023.
- Regeneron to submit a Biologics License Application (BLA) to the FDA for relapsed/refractory (R/R) DLBCL and R/R FL in the second half of 2023.
Zai Labto submit an NDA to the NMPA for ROS1+ advanced NSCLC.
MARGENZA™ (margetuximab, HER2)
- Potential China NDA approval by the NMPA in third-line+ metastatic HER2+ breast cancer.
ZL-2313 (BLU-945, EGFR)
Zai Labpartner Blueprint to present updated results from the dose escalation of the Phase 1/2 SYMPHONY trial showing safety and tolerability of BLU-945 both as a monotherapy and in combination with osimertinib in late-line EGFR-driven NSCLC at the 2023 ASCO Annual Meeting.
- Blueprint to provide an initial clinical data update on the SYMPHONY trial expansion of ZL-2313 in combination with osimertinib in first-line EGFR L858R+ NSCLC in the second half of 2023.
ZL-1218 (CCR8, global rights):
Zai Labto initiate a global Phase 1 study.
Autoimmune Disorders, Infectious Disease and Neuroscience
VYVGART® (efgartigimod, FcRn)
- Potential BLA approval and commercial launch by the NMPA for efgartigimod alfa injection for the treatment of adult patients with gMG in
- Potential BLA submission to the NMPA for SC efgartigimod for the treatment of adult patients with gMG in
Chinain mid-2023. Zai Labto join the global Phase 2/3 BALLAD study in adult patients with bullous pemphigoid in China.
- Potential BLA approval by the FDA for SC efgartigimod for gMG in the first half of 2023, with a Prescription Drug User Fee Act (PDUFA) date of
June 20, 2023. Zai Labpartner argenx BV (argenx) to report topline data from the registrational ADHERE trial of SC efgartigimod for chronic inflammatory demyelinating polyneuropathy (CIDP) in July 2023. Zai Labparticipated in the study in Greater China.
- argenx to report topline data from the registrational Phase 3 ADDRESS trial of SC efgartigimod in pemphigus and the registrational Phase 3 ADVANCE-SC trial of SC efgartigimod in immune thrombocytopenia (ITP) in the fourth quarter of 2023.
Zai Labparticipated in both studies in Greater China.
- Potential FDA approval of the NDA for SUL-DUR, which was accepted for priority review with an action date of
May 29, 2023.
KarXT (xanomeline-trospium, M1/M4-preferring muscarinic acetylcholine receptor)
Zai Labto initiate a bridging study for KarXT for the treatment of patients with schizophrenia in Chinain mid-2023. Zai Labpartner Karuna to submit an NDA to the FDA for KarXT for the treatment of patients with schizophrenia in the third quarter of 2023.
- Karuna to initiate the Phase 3 ADEPT-2 trial in Alzheimer’s disease psychosis in the second half of 2023.
Zai Labplans to participate in the study in Greater China.
First-Quarter 2023 Financial Results
- Product revenues were
$62.8 millionfor the first quarter of 2023, compared to $46.1 millionfor the same period in 2022, representing a 36.2% y-o-y growth. Product revenue for the first quarter of 2023 was $42.7 millionfor ZEJULA, compared to $29.6 millionfor the same period in 2022, representing a 44.2% y-o-y growth; $13.3 millionfor Optune, compared to $12.8 millionfor the same period in 2022, representing a 4.3% y-o-y growth; $1.3 millionfor QINLOCK, compared to $3.0 millionfor the same period in 2022; and $5.5 millionfor NUZYRA, compared to $0.7 millionfor the same period in 2022.
- Note that product revenue for the first quarter of 2023 included a negative
$3.9 millionadjustment to compensate distributors for sales of QINLOCK and NUZYRA at prices prior to the price reductions made in connection with their addition to the NRDL in the first quarter of 2023. Such sales rebates to distributors on previously purchased products are customary in our industry to compensate those distributors for the new NRDL selling price.
- Note that product revenue for the first quarter of 2023 included a negative
- Research and Development (R&D) expenses were
$48.5 millionfor the first quarter of 2023, compared to $53.9 millionfor the same period in 2022. The decrease in R&D expenses was primarily due to cost-sharing compensation from collaboration partners related to our clinical trials, partially offset by higher payroll and payroll-related expenses from increased R&D headcount.
- Selling, General and Administrative expenses were
$62.5 millionfor the first quarter of 2023, compared to $57.0 millionfor the same period in 2022. The increase was primarily due to higher professional service fees and in connection with sales of our products in mainland Chinaand Hong Kong, and higher payroll and payroll-related expenses from increased commercial headcount.
- Net loss was
$49.1 millionfor the first quarter of 2023, or a loss per share attributable to common stockholders of $0.05, compared to a net loss of $82.4 millionfor the same period in 2022, or a loss per share attributable to common stockholders of $0.09. The decrease in net loss was primarily due to product revenue growing faster than operating expenses, and an increase in non-operating income, including interest income and foreign currency gain.
- Cash and cash equivalents, short-term investments and restricted cash totaled
$931.4 millionas of March 31, 2023, compared to $1,009.3 millionas of December 31, 2022.
Conference Call and Webcast Information
Details are as follows:
Registration Link: https://register.vevent.com/register/BI7faa33a643804925b414bbe98d0687b1
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.
Zai Lab (NASDAQ: ZLAB; HKEX: 9688) is an innovative, research-based, commercial-stage biopharmaceutical company based in China and the
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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; capital allocation and investment strategy; 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. 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) the effects of the COVID-19 pandemic on our business and results of operations; (6) risks related to doing business in
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Unaudited Condensed Consolidated Balance Sheets
(in thousands of
|Cash and cash equivalents||879,844||1,008,470|
|Accounts receivable (net of allowance for credit loss of
|Prepayments and other current assets||42,772||35,674|
|Total current assets||1,072,298||1,124,336|
|Restricted cash, non-current||1,003||803|
|Long term investments (including the fair value measured investment of
|Prepayments for equipment||1,721||1,396|
|Property and equipment, net||58,309||57,863|
|Operating lease right-of-use assets||20,148||19,512|
|Land use rights, net||6,920||6,892|
|Intangible assets, net||1,479||1,511|
|Liabilities and shareholders’ equity|
|Current operating lease liabilities||7,318||7,050|
|Other current liabilities||50,881||66,818|
|Total current liabilities||124,560||139,842|
|Non-current operating lease liabilities||12,979||13,343|
|Other non-current liabilities||325||—|
|Ordinary shares (par value of
|Additional paid-in capital||2,911,454||2,893,120|
|Accumulated other comprehensive income||17,272||25,685|
|Treasury Stock (at cost, 3,508,610 and 2,236,280 shares as of
|Total shareholders’ equity||1,001,242||1,045,595|
|Total liabilities and shareholders’ equity||1,170,074||1,220,140|
Unaudited Condensed Consolidated Statements of Operations
(in thousands of $, except for number of shares and per share data)
|Three Months Ended
|Product revenue, net||62,797||46,095|
|Cost of sales||(21,337||)||(15,643||)|
|Research and development||(48,472||)||(53,854||)|
|Selling, general, and administrative||(62,510||)||(56,991||)|
|Loss from operations||(69,522||)||(79,764||)|
|Foreign currency gain||8,912||2,285|
|Other income (expenses), net||1,234||(4,882||)|
|Loss before income tax and share of loss from equity method investment||(49,144||)||(82,173||)|
|Income tax expense||—||—|
|Share of loss from equity method investment||—||(221||)|
|Net loss attributable to ordinary shareholders||(49,144||)||(82,394||)|
|Loss per share - basic and diluted||(0.05||)||(0.09||)|
|Weighted-average shares used in calculating net loss per ordinary share - basic and diluted||961,444,780||955,499,030|
|Loss per American Depositary Shares (“ADS”) - basic and diluted||(0.51||)||(0.86||)|
|Weighted-average ADSs used in calculating net loss per ADS - basic and diluted||96,144,478||95,549,903|
Unaudited Condensed Consolidated Statements of Comprehensive Loss
(in thousands of $)
|Three Months Ended
|Other comprehensive income (loss), net of tax of nil:|
|Foreign currency translation adjustments||(8,413||)||(2,193||)|
Source: Zai Lab Limited