- Total product revenue of $266.7 million for Full-Year 2023,
representing 25% y-o-y growth; 31% y-o-y growth at constant
exchange rate (CER)
- VYVGART® (efgartigimod alfa injection) was launched in
September 2023 in China and we estimate that nearly 1,000 patients
were treated through the fourth quarter before its listing on
China’s National Reimbursement Drug List (NRDL)
- We estimate that nearly 1,000 new patients were treated with
VYVGART in January 2024 alone; expect VYVGART product sales to
exceed $70.0 million in 2024
- Regulatory reviews ongoing for sulbactam-durlobactam,
efgartigimod SC and repotrectinib; up to four new regulatory
submissions expected in 2024
- Strong balance sheet with a cash position of $807.6 million as
of December 31, 2023, compared to $1.0 billion as of December 31,
2022
- Company to host conference call and webcast on February 28,
2024, at 8:00 a.m. ET (9:00 p.m. HKT)
Zai Lab Limited (NASDAQ: ZLAB; HKEX: 9688) today announced
financial results for full-year 2023, along with recent product
highlights and corporate updates.
“We made excellent progress on several key strategic priorities
in 2023, notably the launch of VYVGART in China for generalized
myasthenia gravis (gMG) in September and the drug’s successful
inclusion on China’s NRDL for this indication effective January 1,
2024,” said Dr. Samantha Du, Founder, Chairperson, and Chief
Executive Officer of Zai Lab. “The launch is off to an impressive
start with more patients treated with VYVGART in January than the
last four months of 2023 combined, fueled by high physician
adoption and increased patient access as hospitals add VYVGART to
formularies. Looking ahead, we expect strong commercial performance
across our portfolio this year, and are preparing for three new
potential launches in 2024. We are also excited by the progress of
our late-stage pipeline and our growing global early-stage
development efforts. We are on track to achieve the objectives
outlined in our five-year strategic plan and to position Zai Lab as
a high-growth, profitable and innovative biotech company.”
“We are focused on achieving three corporate objectives,” said
Josh Smiley, President and Chief Operating Officer of Zai Lab.
“First, we seek to accelerate top-line growth supported by multiple
launches of new products and indications over the next two to three
years. Second, we aim to reach corporate profitability by the end
of 2025 through revenue growth and continued focus on efficiency
and productivity. Third, we are committed to building a global
portfolio through our internal discovery activities and strategic
business development. These corporate objectives capture our vision
for Zai Lab, where we lead with innovation, grow with purpose, and
deliver on our mission of improving patient lives globally,” Mr.
Smiley concluded.
Full-Year 2023 Financial
Results
- Product revenue was $266.7 million in 2023, compared to
$212.7 million in 2022, representing 25% y-o-y growth and 31% y-o-y
growth at CER. This increase was primarily driven by increased
sales volumes, the launch of VYVGART, and decreased negative
effects from the COVID-19 pandemic, partially offset by an increase
in sales rebates to distributors and the effects on hospital and
physician practices from the recent industry-wide anti-corruption
enforcement efforts in China in the second half of 2023.
- Sales rebates to distributors resulting from price reductions
in connection with NRDL listings were $13.0 million in 2023, up
from $5.3 million in 2022, driven by an increased number of new and
renewed NRDL listings.
Key Highlights by Commercial Products
ZEJULA®
- $168.8 million in 2023, which increased 16% y-o-y from $145.2
million in 2022.
- The increase was driven by increased hospital sales in
first-line ovarian cancer and duration of treatment prolongment,
partially offset by sales rebates in connection with the renewal in
the NRDL.
- ZEJULA continues to be the leading PARP inhibitor in hospital
sales for ovarian cancer in China, in its third year on the
NRDL.
- ZEJULA’s NRDL listing was renewed for the maintenance treatment
of adult patients with first-line and recurrent ovarian cancer,
effective January 1, 2024.
VYVGART®
- $10.0 million in 2023, compared to nil in 2022.
- We successfully launched VYVGART for the treatment of adult
patients with gMG, who are anti-acetylcholine receptor (AChR)
antibody positive, in September 2023.
- We estimate that nearly 1,000 patients were treated from launch
through the fourth quarter of 2023.
- VYVGART was added to the NRDL for the treatment of gMG,
effective January 1, 2024.
- We estimate that nearly 1,000 new patients were treated in
January 2024 alone driven by positive physician and patient
reception as well as increased patient access as VYVGART is added
to hospital formularies.
- We are expecting more than $70.0 million in VYVGART revenue in
2024.
OPTUNE®
- $47.0 million in 2023, which was relatively flat compared to
$47.3 million in 2022.
- Continued growth in supplemental insurance coverage was offset
by the effects of industry-wide anti-corruption efforts.
QINLOCK®
- $19.2 million in 2023, which increased 29% y-o-y from $15.0
million in 2022.
- Growth was supported by its inclusion in the NRDL in the first
quarter of 2023 for the fourth-line treatment of advanced
gastrointestinal stromal tumors (GIST), partially offset by sales
rebates in connection with the NRDL listing.
NUZYRA®
- $21.7 million in 2023, which increased by 316% y-o-y from $5.2
million in 2022.
- Growth was driven by the initial inclusion of NUZYRA (IV
formulation) for the treatment of adults with community-acquired
bacterial pneumonia (CABP) and acute bacterial skin and skin
structure infections (ABSSSI) in the NRDL in the first quarter of
2023.
- The oral formulation of NUZYRA was added to the NRDL for these
indications, effective January 1, 2024, which we expect to further
increase patient access.
- Research and Development (R&D) expenses were $265.9
million for 2023, compared to $286.4 million for 2022. This
decrease was primarily due to decreased upfront and milestone
payments for our license and collaboration agreements, partially
offset by an increase in personnel compensation and related
costs.
- Selling, General and Administrative expenses were $281.6
million for 2023, compared to $259.0 million for 2022. This
increase was primarily due to higher general selling expenses
related to commercial operations to support the launch of VYVGART,
partially offset by a decrease in professional services fees.
- Net loss was $334.6 million for 2023, or a loss per
ordinary share attributable to common stockholders of $0.35 (or
loss per American Deposit Share (“ADS”) of $3.46), compared to a
net loss of $443.3 million for 2022, or a loss per ordinary share
of $0.46 (or loss per ADS of $4.63). The decrease in net loss was
primarily due to product revenue growing faster than net operating
expenses, increased interest income, and decreased foreign currency
loss.
- Cash and cash equivalents, short-term investments and
restricted cash totaled $807.6 million as of December 31, 2023,
compared to $1.0 billion as of December 31, 2022.
2024 Strategic
Priorities
Zai Lab will focus on the following strategic priorities in 2024
to drive innovation in China and beyond:
Commercial Execution
- Drive VYVGART ramp-up in gMG in its first year of NRDL
inclusion and increase access via hospital listing
- Maintain ZEJULA leadership position in ovarian cancer in
China
- Continue to grow supplemental insurance coverage for OPTUNE
GIO® in glioblastoma (GBM)
- Successfully launch additional products (up to 3) from our
innovative pipeline
Clinical Data and Regulatory Actions
- Potential China approvals:
- Sulbactam-durlobactam in infections caused by susceptible
isolates of Acinetobacter baumannii-calcoaceticus complex
- Efgartigimod SC in gMG
- Repotrectinib in ROS1-positive NSCLC
- Planned China submissions:
- Efgartigimod SC in chronic inflammatory demyelinating
polyneuropathy (CIDP)
- Adagrasib in second-line+ NSCLC
- Tisotumab vedotin in second-line+ cervical cancer
- Tumor Treating Fields in second-line+ NSCLC
- Key clinical data readouts:
- Tumor Treating Fields in first-line brain metastases from NSCLC
(METIS) and first-line locally advanced pancreatic cancer
(PANOVA-3)
- Adagrasib in first-line NSCLC and second-line+ NSCLC
Clinical Development
- Join the global Phase 3 registrational study of efgartigimod in
thyroid eye disease (TED) in Greater China1
- Join the global Phase 3 ADEPT-2 and ADEPT-3 studies of
xanomeline-trospium (or KarXT) in Alzheimer’s disease psychosis
(ADP) in Greater China
- Complete enrollment in the China bridging Phase 3 study of
xanomeline-trospium (or KarXT) in schizophrenia
- Advance ZL-1102 (IL-17 Humabody®) into global Phase 2
development in chronic plaque psoriasis (CPP)
- Enroll patients in the global Phase 1 study for ZL-1310 (DLL3
ADC) in small cell lung cancer (SCLC)
1 Mainland China, Hong Kong, Macau, and Taiwan (collectively,
Greater China).
Recent Pipeline
Highlights
Below are key product updates since our last earnings
release:
Oncology Pipeline
- Tumor Treating Fields:
- In January 2024, Zai Lab partner Novocure announced that the
U.S. Food and Drug Administration (FDA) had accepted for filing its
Premarket Approval (PMA) application seeking approval for the use
of Tumor Treating Fields therapy together with standard systemic
therapies for the treatment of NSCLC, following progression on or
after platinum-based therapy. We are preparing a similar submission
for this indication, with a goal to submit a Marketing
Authorization Application (MAA) to the National Medical Products
Administration (NMPA) in 2024.
- Repotrectinib (ROS1/TRK):
- In February 2024, Zai Lab partner Bristol-Myers Squibb (BMS)
announced that, based on the results of the TRIDENT-1 trial, the
FDA has accepted its supplemental NDA (sNDA) for repotrectinib for
the treatment of adult and pediatric patients 12 years of age and
older with solid tumors that have a neurotrophic tyrosine receptor
kinase (NTRK) gene fusion, and are locally advanced or metastatic
or where surgical resection is likely to result in severe
morbidity. The application was granted priority review status, with
a Prescription Drug User Fee Act (PDUFA) goal date of June 15,
2024.
- In November 2023, BMS announced that, based on results from the
TRIDENT-1 trial, the FDA approved repotrectinib for the treatment
of adult patients with locally advanced or metastatic ROS1-positive
NSCLC. The New Drug Application (NDA) that Zai Lab submitted to the
NMPA for this indication is under priority review.
- Adagrasib (KRASG12C)
- In February 2024, Zai Lab partner BMS announced that, based on
the results of the KRYSTAL-1 trial, the FDA has accepted its sNDA
for adagrasib in combination with cetuximab for the treatment of
patients with previously treated KRASG12C-mutated locally advanced
or metastatic colorectal cancer (CRC). The application was granted
priority review status, with a PDUFA goal date of June 21, 2024. We
are participating in the global confirmatory Phase 3 KRYSTAL-10
study in second-line KRASG12C-mutated CRC in Greater China.
- Bemarituzumab (FGFR2b):
- Zai Lab has joined the global Phase 3 FORTITUDE-102 study of
bemarituzumab in combination with nivolumab and chemotherapy in
first-line gastric or GEJ cancer in Greater China. We expect the
first patient in Greater China to be treated in the first quarter
of 2024.
- ZL-1310 (DLL3 ADC):
- Zai Lab is currently enrolling patients in the United States
and China in the global Phase 1 study in relapsed and refractory
second-line+ SCLC who have progressed after platinum-based
treatment.
Autoimmune Disorders, Infectious Disease, and Neuroscience
Pipeline
- Efgartigimod (FcRn):
- In February 2024, argenx announced that the FDA has accepted
the supplemental Biologics License Application (sBLA) for
efgartigimod SC for the treatment of CIDP with priority review. The
application has been granted a PDUFA goal date of June 21,
2024.
- We plan to submit an sBLA to the NMPA for efgartigimod SC in
CIDP in the first half of 2024.
- Xanomeline-Trospium (or KarXT) (M1/M4-agonist):
- In November 2023, Karuna announced that the FDA has accepted
its NDA for xanomeline-trospium for the treatment of schizophrenia
in adults. The application has been granted a PDUFA goal date of
September 26, 2024. We continue to enroll patients in the
registrational bridging study in mainland China, and we expect to
complete the study this year.
- In November 2023, Karuna announced positive results from its
Phase 1b open-label, eight-week inpatient trial evaluating the
effect of xanomeline-trospium on 24-hour ambulatory blood pressure
in adults with schizophrenia demonstrating that xanomeline-trospium
was not associated with increases in blood pressure.
Anticipated Major Milestones in
2024
Oncology
Tumor Treating Fields
- Zai Lab to submit an MAA to the NMPA in second-line+ NSCLC,
following progression on or after platinum-based therapy.
- Zai Lab partner Novocure to provide a topline data readout from
the phase 3 METIS clinical trial in brain metastases from NSCLC in
the first quarter of 2024. We are participating in the study in
Greater China.
- 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.
Repotrectinib (ROS1/TRK)
- Potential NMPA approval of the NDA in locally advanced or
metastatic ROS1-positive NSCLC.
Adagrasib (KRASG12C)
- Zai Lab to submit an NDA to the NMPA in second-line+
KRASG12C-mutated NSCLC.
- Zai Lab to join the global Phase 3 KRYSTAL-7 study in
first-line KRASG12C-mutated NSCLC with Tumor Proportion Score (TPS)
≥ 50% in Greater China in the second half of 2024.
- Zai Lab partner Mirati, a BMS company, to provide a clinical
data update for the global confirmatory Phase 3 KRYSTAL-12 study in
second-line+ KRASG12C-mutated NSCLC. We are participating in the
study in Greater China.
- Mirati to provide a clinical data update for the global Phase 2
KRYSTAL-17 study in first-line KRASG12C-mutated NSCLC with TPS <
50%.
Tisotumab Vedotin (Tissue Factor ADC)
- Zai Lab to submit an NDA to the NMPA in second-line+ cervical
cancer.
Neuroscience, Autoimmune Disorders, and Infectious Diseases
(NSAiID)
Efgartigimod (FcRn)
- Potential NMPA approval of the sBLA for efgartigimod SC in
gMG.
- Zai Lab to submit an sBLA to the NMPA for efgartigimod SC in
CIDP in the first half of 2024.
- Zai Lab partner argenx to initiate a registrational study of
efgartigimod in TED. Zai Lab plans to participate in the study in
Greater China in the second half of 2024.
Sulbactam-Durlobactam (SUL-DUR)
- Potential NMPA approval of the NDA in infections caused by
susceptible isolates of Acinetobacter baumannii-calcoaceticus
complex.
Xanomeline-Trospium (or KarXT) (M1/M4-agonist)
- Zai Lab to complete patient enrollment in the China bridging
study in schizophrenia in the fourth quarter of 2024.
- Zai Lab to join the global Phase 3 ADEPT-2 and ADEPT-3 studies
in ADP in Greater China in mid-year.
- Zai Lab partner Karuna to report topline data from the
EMERGENT-4 and EMERGENT-5 trials evaluating the long-term safety
for treatment of schizophrenia in the second half of 2024.
ZL-1102 (IL-17 Humabody®)
- Zai Lab to initiate a global Phase 2 study in mild-to-moderate
chronic plaque psoriasis in mid-year.
Conference Call and Webcast
Information
Zai Lab will host a live conference call and webcast tomorrow,
February 28, 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/BIa1fd72e50c9e4117b696c49bdfa9f83b
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 (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, autoimmune disorders, infectious diseases, and
neuroscience. 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, which 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
Consolidated Balance Sheets
(in thousands of U.S. dollars (“$”),
except for number of shares and per share data)
December 31,
2023
2022
Assets
Current assets
Cash and cash equivalents
790,151
1,008,470
Short-term investments
16,300
—
Accounts receivable (net of allowance for
credit loss of $17 and $11 as of December 31, 2023 and 2022,
respectively)
59,199
39,963
Notes receivable
6,134
8,608
Inventories, net
44,827
31,621
Prepayments and other current assets
22,995
35,674
Total current assets
939,606
1,124,336
Restricted cash, non-current
1,113
803
Long-term investments
9,220
6,431
Prepayments for equipment
111
1,396
Property and equipment, net
53,734
57,863
Operating lease right-of-use assets
14,844
19,512
Land use rights, net
3,069
6,892
Intangible assets, net
13,389
1,511
Long-term deposits
1,209
1,396
Total assets
1,036,295
1,220,140
Liabilities and shareholders’
equity
Current liabilities
Accounts payable
112,991
65,974
Current operating lease liabilities
7,104
7,050
Other current liabilities
82,972
66,818
Total current liabilities
203,067
139,842
Deferred income
28,738
21,360
Non-current operating lease
liabilities
8,047
13,343
Other non-current liabilities
325
—
Total liabilities
240,177
174,545
Commitments and contingencies
Shareholders’ equity
Ordinary shares (par value of $0.000006
per share; 5,000,000,000 shares authorized, 977,151,270 and
962,455,850 shares issued as of December 31, 2023 and 2022,
respectively; 972,239,070 and 960,219,570 shares issued and
outstanding as of December 31, 2023 and 2022, respectively)
6
6
Additional paid-in capital
2,975,302
2,893,120
Accumulated deficit
(2,195,980
)
(1,861,360
)
Accumulated other comprehensive income
37,626
25,685
Treasury stock (at cost, 4,912,200 and
2,236,280 shares as of December 31, 2023 and 2022,
respectively)
(20,836
)
(11,856
)
Total shareholders’ equity
796,118
1,045,595
Total liabilities and shareholders’
equity
1,036,295
1,220,140
Zai Lab Limited
Consolidated Statements of
Operations
(in thousands of $, except for number
of shares and per share data)
Year Ended December
31,
2023
2022
2021
Revenues
Product revenue, net
266,719
212,672
144,105
Collaboration revenue
—
2,368
207
Total revenues
266,719
215,040
144,312
Expenses
Cost of sales
(95,816
)
(74,018
)
(52,239
)
Research and development
(265,868
)
(286,408
)
(573,306
)
Selling, general and administrative
(281,608
)
(258,971
)
(218,831
)
Gain on sale of intellectual property
10,000
—
—
Loss from operations
(366,573
)
(404,357
)
(700,064
)
Interest income
39,797
14,582
2,190
Foreign currency (loss) gain
(14,850
)
(56,403
)
4,661
Other income (expense), net
7,006
3,113
(10,201
)
Loss before income tax and share of loss
from equity method investment
(334,620
)
(443,065
)
(703,414
)
Income tax expense
—
—
—
Share of loss from equity method
investment
—
(221
)
(1,057
)
Net loss
(334,620
)
(443,286
)
(704,471
)
Loss per share — basic and diluted
(0.35
)
(0.46
)
(0.76
)
Weighted-average shares used in
calculating net loss per ordinary share — basic and diluted
966,394,130
958,067,140
929,921,120
Note: Basic and diluted net loss per ordinary share, weighted
average number of ordinary shares for the year ended December 31,
2021 have been retrospectively adjusted as a result of the Share
Subdivision that became effective on March 30, 2022.
Zai Lab Limited
Consolidated Statements of
Comprehensive Loss
(in thousands of $)
Year Ended December
31,
2023
2022
2021
Net loss
(334,620
)
(443,286
)
(704,471
)
Other comprehensive income (loss), net of
tax of nil:
Foreign currency translation
adjustments
11,941
49,330
(9,121
)
Comprehensive loss
(322,679
)
(393,956
)
(713,592
)
Zai Lab Limited
Non-GAAP Measures
(In thousands of $)
Year Ended December
31,
Year over Year %
Growth
2023
2022
As reported
At CER*
Product revenue, net
266,719
212,672
25
%
31
%
Loss from operations
(366,573
)
(404,357
)
(9
)%
(7
)%
* The growth rates at constant exchange rates (CER) were
calculated assuming the same foreign currency exchange rates were
in effect for the current and prior year periods.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240227802106/en/
For more information:
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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