Full Year 2020 Zai Lab Ltd Earnings Call

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Ladies and gentlemen, todays conference call is scheduled to begin shortly until such time. Your line will remain on music hold please continue to standby. We thank you for your patience.

Operator: Ladies and gentlemen, today's conference call is due to begin shortly. Until such time, your line will remain on music hall. Please continue to stand by. We thank you for your patience.

Unknown Executive: Hello ladies and gentlemen, thank you for standing by, and welcome to Zai Lab.

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Unknown Executive: Zai Lab's second half and full year 2020 financial results and corporate updates are coming soon.

Unknown Executive: Conference call. Well, at this time, all participants are in a listen-only mode. Later, we will conduct

Unknown Executive: Contact the question and answer session, and instructions will follow at that time. As a reminder, today's call is being recorded. It is now my pleasure to turn the floor over to Mr. Billy Cho, Chief Financial Officer of Zai Lab, who will make introductory comments. Thank you, operator.

Hello, ladies and gentlemen, and thank you for standing by and the World Cup design lab second half and full year 2020 financial results and corporate update conference call well at this time all participants are in a listen only mode.

Unknown Executive: Good morning, and welcome to Zai Lab's second half and full year 2020 financial results and corporate updates conference call. Earlier this morning, Zai Lab issued a press release providing the details of the company's financial results for the full year ended December 31, 2020, as well as recent corporate updates. The press release is available in the IR section of the company's corporate website at ir.zailibrary.com. Today's call will be led by Balthazar Sabatadu, Zai Lab's Founder, Chairperson, and Chief Executive Officer.

Later, we will conduct the question and answer session and instructions will so low at the time as.

As a reminder, today's call is being recorded.

It is now my pleasure to turn the floor over to Miss the Billy true Chief Financial Officer of sort of lab, who will make introductory comments.

Thank you operator, good morning, and welcome to the second pass the full years of doesn't.

The corporate update conference call.

Earlier this morning, the outlet issued a press release, providing the details of the company.

For the full year ended December 31, 2020, as well as the corporate update the.

The press release is available in the IR section of the company's corporate website at IR.

For that side of it.

He got called.

Today's call will be led by both of its about the do.

Founder Chairperson and Chief Executive Officer, she'll be joined by Chief Operating Officer, who will provide more detail on our strategy and key pipeline assets, including the upcoming milestones and commercial progress been talking Wang head of business development will discuss we used the partnership activity.

Unknown Executive: She will be joined by Tao Fu, Chief Operating Officer, who will provide more details on our strategy and key pipeline assets, including upcoming milestones and commercial progress. Ben Thompson Wang, Head of Business Development, will discuss recent partnership activities. Dr. Alan Sandler, President, Head of Global Development Oncology, and Dr. Harald Reinhart, Chief Medical Officer for Autoimmune and Infectious Diseases, will also be available to answer questions during the Q&A portion of the call.

All of the teller.

President of.

Global development of oncology and both of the Herald Reinhart, She's got a cost of for autoimmune.

The.

We will also be available to answer the questions during the Q&A portion of the call.

Unknown Executive: As a reminder, during today's call, Zai Lab will be making certain forward-looking statements within the meaning of the Private Securities Mitigation Reform Act of 1995, including the business plans and objectives, and the timing and success of our clinical trials, regulatory applications, and commercial launches. Such forward-looking statements are not guarantees of future performance, and therefore you should not put undue reliance upon them. These statements are subject to numerous risks and uncertainties that could cause actual results to differ materially from what we expect.

As a reminder, during today's call dialog will be making certain forward looking statements within the meaning of the private Securities Litigation Reform Act of 95.

Right.

Our business plans and objectives and timing of success of our clinical trials regulatory applications and commercial launches such forward looking statements are not guarantees of future performance and therefore, you should not put undue reliance upon them.

These statements are subject to numerous risks and uncertainties that could cause actual results to differ materially from what we expect.

Unknown Executive: I refer you to our SEC filings for a discussion of risk factors that could cause our actual results to differ materially from those discussed today. At this time, it is my pleasure to turn the call over to Dialogues Founder, Chairperson, and Chief Executive Officer, Dr. Samantha Du.

I refer you for a SEC filings for a discussion of risk factors that could cause our actual results to differ materially from those discussed today.

At this time it is my pleasure to turn the call over to <unk>, founder Chairperson and Chief Executive Officer buckets not to do.

Ying Du: Thank you, Billy. Hello, everyone, and thank you all for joining us. We have investors around the world, so I truly hope everyone and their loved ones are safe and healthy. I'd also like to thank all of our investors for your continued interest and support. On this call, I'll provide a quick overview of Zai Lab's strategic position, highlight some of our 2020 achievements and 2021 goals, and provide remarks as to why we are so excited about our future.

Thank you Billy.

Hello, everyone and thank you all for joining us.

We have the investors around the world.

So I truly hope every one of them their loved one.

And healthy.

I would also like to thank all of Nisource for Ya.

The interest since of course.

On this call I'll provide the quick overview of free.

I like the strategic position.

Highlights some of our.

The 22 of these achievements in terms of it could be one kohl's will provide remarks.

Why we are so excited about future.

Ying Du: I'm proud to start by stating that we believe Zai Lab is poised to become a global leading biopharmaceutical company. We have come to this point by leveraging China's rapid emergence as the second largest and fastest growing pharmaceutical market, together with our proven track record of execution with speed and quality. In the six years since the company was founded, we have created a portfolio of 21 innovative products at Zai Lab, which we have now commercialized.

I'm proud of it.

That we believe dry lab is poised to become a global leading biopharmaceutical company.

We have come to this point, but leveraging kind of rapid margin ex us.

Second the largest and fastest growing pharmaceutical market.

Together with all of the proven track record of us.

And the fee.

The quality.

In the six years since the company was founded.

It has created a portfolio of tens of one innovative products outside of life.

We have now commercialized.

Ying Du: The first two of these products in China with four indications, and another two products currently pending approval with priority review set. We have a total of 17 products in clinical development, of which 11 are in late stage development, and five have already been approved in the U.S. I also want to highlight that, along with our growing pipeline, we have seven early stage products. WorldWideLife, including three global clinical trials. So we have made remarkable progress in just six years. We had another year of great accomplishments in 2020, and I'm very proud of our team and all the support we have received.

First true of this product in China with for indication.

And then another two products the currently pending approval with priority review status.

We have a total of 17 products in clinical development.

Of which 11 are in late stage development.

<unk> has already been approved in the U S.

I also want the highlight that along with all of our growing pipeline.

It has seven early stage product.

Worldwide rights.

Clothing, three global clinical trials.

So we have made remarkable progress in just six years.

We had another year of great calm fishermen inconsistently.

And I'm very proud of all of our team and all of the support we have the scene.

Ying Du: We successfully launched our first two products in China. As I mentioned earlier, Sazula for both second-line and first-line ovarian cancer, and Optum for newly diagnosed and recurrent GBM.

We successfully lungs are the first of the products in China.

As I mentioned earlier.

So it's the law for both second line and the first line ovarian cancer now to the newly back most of recurrent GBM.

Ying Du: In addition, we submitted two NDAs, both under priority review. One for Chin Lock, and one for Chin Lock.

In addition, we submitted two N D a.

Both on the product here with us.

One for Ching law for.

Advanced piece.

Ying Du: One for New Zero, for community-acquired bacterial pneumonia and for acute bacterial skin and skin structure infections in China. We continue to expand our pathway and strengthen our DG franchises by forming new strategic partners with four leading biopharma companies for five important compounds that we believe can help address significant medical needs. We also continue to execute in clinical development and now have more than 40 ongoing or planned clinical trials. We accomplished all of this despite the challenges posed by the COVID-19 pandemic. Looking ahead to 2021, we expect long-term losses in the very time.

One for new Terror for community acquired bacterial pneumonia and for acute bacterial skin structure infections in China.

We continue to fund all of the past life and strength.

I would say geez friends HIFU.

By forming new strategic partner.

For leading biopharma companies for.

By the importance of compounds.

That we believe can help us size it.

Disciplined unmet medical need.

We also continue to execute the clinical development.

And now have more than 40 of.

Going for planned clinical trials.

We accomplished all of the.

Despite the challenges posed by the COVID-19 pandemic.

Looking ahead for 2021.

We expect the lungs ching losses and salary of your time.

Ying Du: We also plan to submit two regulatory signings. One for tumor treating fields in mesothelioma and one for martizumab in her true positive breast cancer in China. We expect to hold regulatory discussions with NMPA regarding a potential accelerated pass rate for EFGON, for which our argument. We have already filed a DLA in the U.S. for Chief and Chief. We expect to obtain new clinical data for a number of products. Krauss, other portfolio, including but not limited to ZULA. Tumor Treatment Fields with Prickliness, Smart Tooth Masks, and CLN081.

We also plan to submit to rest of the truth findings.

One for tumor treating field mesothelioma and <unk>.

One for Mark to the mats in her two positive breast cancers in time.

We expect the whole regulatory discussions with <unk> regarding the potential of salary the possibly for ESCO.

But which of your.

For argument.

Its already filed a BLA in the U S.

Oh T N T.

The weak fast to obtain new clinical data for the number of products.

For all of us for the for you.

Clothing, but not limited to.

Cause of loss.

Tumor treating fields the Christmas.

To sum up the C.

C L M zero 81.

Ying Du: Over the long run, we plan to continue our growth trajectory through strong execution of our business development, internal R&D, and commercialization strategy. We have few disease strongholds in three therapeutic areas: Oncology, Autoimmune Disorders, and Infectious Diseases.

Over the long run.

We plan to continue our gross catastrophe losses.

Strong execution of our business development and <unk>.

The R&D and commercialization strategy.

We had fewer disease strongholds.

Three therapeutic area.

Oncology autoimmune disorder, and the fastest diseases.

Ying Du: Within oncology, we have focused on five kinds of franchises, which accounts for over half of all new kinds of patients in China, gastric lung cancer, where we have fielded world-class portfolios in just three years, as well as women's cancer, brain cancer, and hematology, to strive to expand the product pipeline, both vertically within this area of focus and horizontally into new therapeutic areas. Significant and Magnetic Means We also expect to realize orthogonal synergies across several technology platforms, whether it be targeted therapies, IOs, TT fields, or others, with proprietary combinations to maximize the value of our portfolio.

Within the oncology, we have focused on five kinds of franchises.

Hung for over half of all new kinds of patients in China.

That's for lung cancer, where we have world class for the folio of just three years.

As well as women's cancer Green Hunter the hematology.

The drive through the expanded product pipeline.

Where do you play within the areas of focus and how it's centrally into new therapeutic areas.

Michigan unmet medical need.

We also expanded career life for swapping those synergies across several technology platforms.

Weather for the targeted therapy.

I O T T cells for.

The other.

With proprietary combination the maximized the value of Ara for the photo.

Ying Du: Our success has been driven by a relentless focus on executing our strategy when we founded Fairlight in 2014. We dedicate ourselves, bringing first-in-class therapy to patients in China and Beyond for Trite, Significant, and Mathematical Needs.

Our success has been driven by.

Net with London, and the focus on executing all of our strategy.

When we founded satellite in 2014.

With dedicated ourselves.

For bringing first.

The only in class therapy for.

For patients in China and the.

So the threat significant unmet medical need.

Ying Du: In the process of doing that, we have established ourselves as the partner of choice for Greater China. This, in turn, allowed us to bring in world-class assets and build end-to-end capabilities, including commercialization. We have achieved substantial scale, with our organization now consisting of nearly 1200 employees across eight major locations around the world. We have continued to enhance our global leadership capabilities, for example, by hiring Dr. Ellen Sandler to lead our global oncology development.

In the process of doing that.

Fabrice for ourselves.

The partner of choice for greater China.

They in turn low.

All of those the food.

World Class asset.

And the capabilities, including commercialization.

We have two substantial scale with other authorization now consisting of nearly 12 hundreds of employees across eight series of locations around the world.

We have continued to enhance all the global leadership capabilities. For example by how he thought for Allen Center leads are of a global oncology development.

Ying Du: With this foundation, our top priority is to become a leading global biopharma company by 2023. Although we are proud of our accomplishments today, we have a lot more work to do to fulfill our mission. Many of you know that Zai Lab in Chinese means once again reaching the top of the mountain.

With the foundation of our top priorities for six weeks.

Com, a leading global Biopharma company by 'twenty three.

Although we are proud of all of our accomplishments to date.

We have a lot more work to do for.

Fulfill our mission.

Many of you know the satellite in Chinese means once again reach the.

Topics amongst them.

Ying Du: All the hard work over the last six years has equipped it, time-of-drive, and committed us to confidently lead the base camp and start climbing our Mt. Everest.

All of the hard work over the last six years.

Has eclipses and the drive.

Immediate us for.

Comfortably leave the base camp the stars timing of our moms ever ex.

Tao Fu: We are excited to have you on this journey with us. Thank you. And now, I'll ask Tao to discuss our performance and perspective in more detail. How?

We are excited to have you on the certainly with us.

Thank you.

And now I'll ask Paul to discuss our performance in perspective multi pill.

Tao Fu: Thank you, Samantha. I will discuss our near-term commercial performance, our expected 2021 launches, and a few important franchises we're building for the long term in gastric and lung cancer and autoimmune diseases. Last year, we successfully launched ZULA in China for second-line ovarian cancer in January during the COVID pandemic, and for first-line ovarian cancer in September, less than six months after we submitted our SNBA. Sejula is the only PARP inhibitor approved for all comers in the first-line setting.

Thank you for Michael.

I will discuss of our near term commercial performance all expected for 2021 launches in a few important franchises for building for the long term, the gastric and lung cancer and autoimmune diseases.

Last year, we successfully launched of the jewel in China for second line ovarian cancer in January when the Covid pandemic.

And for first line ovarian cancer in September less than six months. After we submitted all of F N b.

The jewelry is the only PARP inhibitor approved for all comers in the first line setting.

Tao Fu: In comparison, other PARP inhibitors have labels restricting their use to patients with G-blocker mutations, which comprise only about 15% of ovarian cancer patients. The results of the PRIMA study conducted by GSK globally and the NORA study sponsored by ZAI in China demonstrated that an individualized starting dose regimen of Fodula preserves efficacy while improving the product's side effect profile, which further differentiates Zajula from other PARP inhibitors

In comparison all of the PARP inhibitors of labels restricting the use of patients with G block of mutations, which comprise only about 15% of ovarian cancer patients.

The resolve of of the Prima study conduct by GSK globally.

The normal studies sponsored by <unk> in China demonstrated that on the individualized the starting dose regimen of the jeweler preserves the efficacy while improving the products why do you think the football.

This further differentiates the jewel of.

The other PARP inhibitors.

Tao Fu: On the commercial front, our team has been successful in gaining reimbursement from commercial health insurance, with coverage currently being provided by 67 commercial health insurance plans and 44 supplemental insurance plans. Importantly, we are now at the forefront of inclusion in an RDL for 2021, which should further drive strong volume growth. We're pleased with our launch performance so far, and over time, we believe that Zezula will become the market-leading PARC inhibitor in China.

On the commercial fund all of it.

<unk> has been successful in gaining reimbursement for the commercial health insurance with coverage currently being provided by 67 commercial health insurance plans and 40 for supplemental insurance of one.

Importantly, we analysis of the jewel of the infusion and our deal for 2021, which should further drive strong volume growth.

We're pleased with our launch performance, so far and overtime, we believe that the drug will become the market, leading PARP inhibitor in China.

Tao Fu: We launched Optum in China in late June 2020. The product is the first novel treatment for glioblastoma approved by the NMPA in the last 15 years. It was highly anticipated by the medical community and was already recommended by the National Glioma Guidelines prior to launch. With our team's efforts, Optium became the first innovative medical device supported by commercial health insurance in China, and it is also covered in 10 supplemental insurance plans

We lost the auto in China in late June 2020.

<unk> is the first novel treatment in Glioblastoma approved by the MPA for the last 15 years it.

It was highly anticipated by the medical community and it was already recommended by the National Akiyama guidelines prior to launch.

With all the teams effort.

Two of them became the first of innovative medical device supported by commercial health insurance in China and it is also covered in terms of supplemental insurance funds.

Tao Fu: We've deployed innovative strategies to support patient access and rapid uptake, including establishing 24 direct-to-patient centers in China. Importantly, we're working with our partner Novacure to potentially expand the indications of tumor treating fields in areas of large unmet medical need. Additional late-stage studies are underway in tumor types potentially affecting over a million and a half new patients a year in China. We and our partner Novacure expect to have several important data readouts in 2021, including interim analysis of phase three pivotal trials of ovarian and lung cancer and results in a pivotal phase two study in liver cancer. We expect to complete enrollment in our own phase two study in gastric cancer by the end of 2021. Now, let's look at the launches we expect this year.

We deployed innovative strategies to support patient access and rapid uptake the inquiry.

Establishing 'twenty for direct to patient centers in China.

Importantly, we are working with our partner novocure to potentially expand the indications of tumor treating fields in the areas of large unmet medical need.

I just don't late stage studies underway in tumor types of potentially affecting over 1 million of the hot new patients per year in China.

We kind of all partner Novocure expects to have several important data readouts in 2021.

The interim analysis of phase three.

The pivotal trials in ovarian and lung cancer and result in a pivotal phase III study in liver cancer.

We expect to complete enrollment of phase III studies in gastric cancer by the end of 2021.

Now, let's look at the launches we expect this year.

Tao Fu: We filed Chinese law for approval in China last July, and it is under priority review. We expect to launch the product in the fourth line just in 2021. Chinlock is the first approved tyrosine kinase inhibitor designed specifically for GIST patients, regardless of mutational status. The INVICTUS trial demonstrated a significant benefit versus placebo in progression-free survival and overall survival and served as the basis for Chin-La's approval in the U.S. in May 2020. Hotline data from the Phase 3 Global Pivotal Intrigue Trial in second-line GIFs are expected in the second half of 2021 and could potentially support label expansion in this important indication.

We filed the Chin law for a pool in China last July and it is under priority review.

We expect the launch the product in the fourth line Gist in 2021.

<unk> is the first approved the tyrosine kinase inhibitor designed specifically for just the patients regardless of the mutational status.

Invictus trial demonstrated a significant significant benefit versus placebo and progression free survival and overall for survival and served as the basis. The chin lots of approval in the U S. In May 2020.

Top line data for the phase III global pivotal in free trial in the second lunches are expected in the second half of 2021 and could the potential potentially support label expansion in this important indication.

Tao Fu: We also filed Nuzera, a tetracycline antibiotic, for approval in China last year for acute bacterial skin and skin structure infections and community-acquired bacterial pneumonia, and it is under priority review. We expect to launch New Zera in 2021. We believe that Mucero has the potential to become a preferred choice of physicians for use as a broad-spectrum model therapy antibiotic in disease areas where antibiotic resistance is a significant concern in China. Looking further into the future, we have a highly visible near-term pipeline and could potentially launch more than 10 additional products over the next three to four years.

We also filed and the bureau of types of cycling antibiotic for approval in China last year for acute bacterial skin and skin structure infections and community acquired bacterial pneumonia.

It is under priority review.

We expect to launch the zero in 2021.

We believe that the demo it has the potential to become a preferred choice of physicians will use of the.

Broad spectrum monotherapy of antibiotics in disease areas, where antibiotic resistance is of significant concern in China.

Looking further into the future.

All of a highly visible near term pipeline and could potentially launch for more than 10 additional products over the next leader for years.

Tao Fu: While we don't have time to discuss all of these products in detail, I'd like to highlight three disease strongholds we have built, gastric cancer, lung cancer, and autoimmune disease, and some of the exciting products we are developing in these areas. Gastric cancer is the second most commonly diagnosed cancer type in China, with an estimated...

While we don't have time to discuss all of the product in detail I'd like to highlight three disease fall hole, we have dual gastric cancer lung cancer and autoimmune disease.

Some of the of exciting product with the <unk>.

In these areas.

Yeah.

They also chose for the second most commonly diagnosed the cancer type in China with an estimated 600000 70000, new cases annually.

Tao Fu: Unsponsored ADR, and it is one of the leading causes of cancer death. We have built a comprehensive and synergistic portfolio of at least six product candidates in just three years. We believe we have one of the most innovative and formidable gastric cancer pipelines in the world today. The targeted agents Imurutu-Zumab, Marjitukumab, and TPX0022 all have positive clinical proof-of-concept data. And combined, they could cover nearly half of gastric cancer patients in China.

And it is one of the leading causes of cancer death.

We have built a comprehensive and synergistic portfolio of at least six part of candidates in just three years.

We believe we have one of the most innovative and formidable gastric cancer pipeline in the world today.

The targeted agents.

Two of them out margin talks about on T X. The hold there were 22, all have positive clinical proof of concept data.

And combined they could cover nearly half of gastric cancer patients in China.

Tao Fu: In addition, our pipeline includes Ritretinib for GIST, the combination of Neuropirib and the PB1 Log3 bispecific pibotilumab, and tumor treating. Lung cancer is the most commonly diagnosed cancer type and the leading cause of cancer death in China.

In addition, our of <unk>.

Pipeline includes the recruitment suggest the combination of Niraparib and the PD one lag three by specific people till the mab and tumor treating fields.

A lot of cancer is the most commonly diagnosed cancer types and the leading cause of cancer deaths in China.

Tao Fu: We have built a differentiated franchise of at least five product candidates that include the target agents Reprotrectinib, CLN-081, and TPX-0022, the immunotherapy agents Ritafenamab, and tumor-treating agents. We believe our precision medicine portfolio provides broad coverage of key driver mutations, and together, they can address up to 15% of non-small cell lung cancer patients in China. In addition, these targeted agents may be synergistic with other modalities in our portfolio, such as checkpoint inhibitors and tumor-treating agents, allowing us to pursue a novel combination. In 2020, we also significantly boosted our autoimmune franchise with the addition of Escart Kijima.

We have built a differentiated franchise of of leaf byproduct candidates.

And for the targeted agent the protecting it.

The whole 81, and Gtx geological 'twenty two.

Immunotherapy agents with the offending lab and tumor treating fields.

We believe our provision medicine portfolio provides broad coverage of key driver mutation and together they can address the absolute 15% of non small cell lung cancer patients in China.

In addition, these targeted agents may be synergistic with other modalities in our portfolio.

All of a checkpoint inhibitor and tumor treating fields.

Allowing us to proceed with novel combinations.

In 2020, we also significantly boosted.

The autoimmune franchise with the addition of <unk>.

Could you at all.

Jonathan J. Wang: As a late stage, potential first-in-class asset with the potential for multiple indications, FKRTGMOD will be the anchor asset for ZAI in the autoimmune area, where we are seeing a fast-growing market with significant unmet medical needs. As you can see, we continue to strengthen our existing franchises vertically and expand into new areas horizontally through strategic partnerships, and this remains a key growth strategy for SAIF going forward. Now, I would like to turn the floor over to my colleague, Jonathan Wang, Head of Business Development, to discuss a few new product candidates we brought in for our in-licensing deal last year. Jonathan.

As of late stage potential first in class of asset with the potential for multiple indications of scar tissue Mod will be the anchor outfit for site in audio and even the area, where we are seeing the fast growing market with significant unmet medical need.

As you can see we continue to strengthen our existing franchises vertically and expand into new areas of horizontally to strategic partnerships and this remains a key growth strategy for life going forward.

Now I would like to turn the floor over to my colleague, Jonathan Wang head of business development to discuss.

A few of new product candidate that we bought into all of in licensing deal last year Jonathan.

Jonathan J. Wang: Samantha mentioned that we had formed four new partnerships for five products over the last 12 months, including three new partnerships announced in late December and early January. These partnerships speak to the high standards we have for the products we enlist and for the partners we have the privilege of working with. Furthermore, we have consistently succeeded in licensing several products each year since the inception of the company. We're more focused on quality than on quantity.

Thank you Tal the.

Amanda mentioned that we had formed for new partnerships for five products over the last 12 months, including three new partnerships announced in late December and early January.

These partnerships speak to the high standard we have for the products, we in license and for the partners. We have the privilege to work with.

While we have consistently succeeded in licensing several product each year since the inception of the company.

We're more focused on quality than quantity.

Jonathan J. Wang: I'd like to speak to you now about our most recent deals, each of which is strategic for our country's peace growth and the bolstering of franchising lung cancer, the leading cause of cancer death in China. We acquired the right. Unsponsored ADR. In December, we reached an exclusive agreement with Cullinan Oncology for the rights in Greater China to CLN 081. This compound is a potential best-in-class small molecule that targets cells expressing EGFR exon 20 insertion mutation in non-small-celled lung cancer, which currently approved EGFR inhibitors do not adequately address. The unmet need in this patient population is significant in China, where EGFR mutation rates are the highest in the world. Approximately 45% of overall non-small cell lung cancer is driven by an EGFR exon 20 insertion mutation.

I'd like to speak to you know the most recent deals each of which the strategic for account growth.

The bolster our franchise in lung cancer, the leading cause of tens of debt in China.

We acquired the rights of several.

Several innovative and highly differentiated type of therapy.

In December we.

We reached an exclusive agreement.

With color on the oncology for the rights in greater China and.

And we are eight one.

This compound has the potential best in class small molecule the target cell expressing egfr exon 20 insertion mutation in non small cell lung cancer.

What's currently approved Egfr inhibitors do not adequately address.

The unmet need in this patient population the significant in China.

Where egfr mutation rate of the highest in the world.

The approximately 45 per cent of overall of non small cell lung cancer is driven by Egfr exon 20 insertion mutations.

Jonathan J. Wang: So we're talking about over 30,000 addressable new patients each year. Our partner, Cullinan, recently announced their decision to move forward with Phase 2a expansion cohorts based on encouraging data from the ongoing Phase 1-2 trial. Zai expects to begin recruiting Chinese patients into a global pivotal trial later this year.

But we're talking about over 30000 addressable new patients each year.

Upon the economy, and recently announced the decision to move forward with Phase Iia expansion cohort based on the encouraging data from the ongoing phase one two trial.

No I expect the begin recruiting Chinese patients into a global pivotal trial later this year.

Jonathan J. Wang: We expanded not only our lung cancer franchise but also our gastric cancer franchise with two collaborations with Turning Point Therapeutics. You may recall that last July, we reached an exclusive agreement to collaborate with Turning Point on retro-tracking it. Breakthrough Therapy Designated Product, which targets tumors overexpressing ROS1 and NTRAP. ROS1 is estimated to be an oncogenic driver in approximately 2-3% of patients with advanced non-small cell lung cancer and NTRAC in approximately 1.5-1% of patients with other advanced solid tumors in China.

We expanded not only out of lung cancer franchise, but also our gas depends of the franchise with two collaborations with turning point therapeutics.

You may recall that last July we reached an exclusive agreement to collaborate with turning point of Revpar tracking at the.

The breakthrough therapy designation of product, which targets tumors over expressing Ross one and track.

Ross one is estimated to be an oncogenic driver in approximately 2% to 3% of patients with advanced non small cell lung cancer and the N track in approximately one half of 1% of patients with other advanced solid shipments in China.

Jonathan J. Wang: We will begin recruiting patients in China for the TRIDEM-1 study in the third half of this year, and this could be the basis for potential approval. We further expanded our partnership with Turning Point in January by adding a second molecule, TPX022, a promising NET-STARC-CSF1R inhibitor that is highly synergistic with our portfolio. Turning Point has reported initial encouraging safety and efficacy data across multiple tumor types, including non-small cell lung cancer and especially gastric cancer, where there is high unmet medical need in China.

We will begin recruiting patients in China for the Trident one study in the first half of this year.

Which could be the basis for potential approval.

We further extended our partnership with turning point in January by adding a second molecule.

The other 22 of promising met the CSF Oner inhibitor that is highly synergistic with our portfolio.

Turning point has reported initial encouraging safety and efficacy data across multiple tumor types, including non small cell lung cancer, and especially in gastric cancer, where the.

There is high unmet medical need in China.

Jonathan J. Wang: In the second half of this year, Turning Point anticipates initiating the Phase 2 portion of the SHIELD1 study, pending FDA feedback. And finally, in January, we reached an exclusive agreement with Argenic for the Great China Rise to Escargot Digimon, as an anchor asset for our audit union franchise. We have specifically targeted the most severe and poorly served autoimmune diseases. FDAR is truly a pipeline and a product opportunity with ongoing clinical development by Argenix in GMG, ITP, PantherGIS, and CRDP. Conditions with more than 400,000 patients combined in China that have potential applications in at least eight other autoimmune diseases.

In the second half of this year hunting point anticipate initiating the phase II portion of the shield one study pending FDA feedback.

And finally in January we reached an exclusive agreement with allogeneic.

For the greater China rights to influx of demand.

Anchor asset for orders of new franchise we.

We have specifically targeted the most severe and 40 served autoimmune diseases.

The thought is truly a pipeline of product opportunity with the ongoing clinical development by allogeneic and GMT ICP and for guests and CRB peak condition.

Condition with more than 400000 patients combined in China.

It has potential applications in at least eight other auto immune diseases.

And Scott has followed in the U S for G. M D. The <unk> intends to begin the regulatory discussions in China This year for <unk>.

Jonathan J. Wang: FDAR has been filed in the U.S. for GMG. It is our intent to begin regulatory discussions in China this year for a potential accelerated regulatory pathway for the product. Even with our recent success, I want to make clear that we're not going to rest on our laurels, with our strong track record of in-licensing potential best-in-class and or first-in-class assets. Supported by strong development and commercial execution, we have established a sustainable and leading platform to continue to bring in world-class assets that address unmet needs in China.

Potential accelerated regulatory pathway for the product.

Even with our recent success I want to make clear that we're not going to the rest on our laurels with a strong track record of in licensing potential best in class and the best in class asset.

Supported by strong development and commercial execution.

We have established a sustainable and leading platform to continue to bring in low cost assets.

The address unmet needs in China.

We will continue to use business development as a key strategy to expand our business both vertically and horizontally.

With a strong pipeline of potential deals, we expect to continue to strengthen our franchises through BD and the internal efforts, including the possibility of transformative partnerships in China and beyond.

Jonathan J. Wang: We will continue to use business development as a key strategy to expand our business both vertically and horizontally, with a strong pipeline of potential deals. We expect to continue to strengthen our franchises through VD and internal efforts, including the possibility of transformative partnerships in China and beyond.

And I will now turn the floor back over to Billy.

Thank you Jonathan.

I will now review our financial results for the full year ended December 31 2020.

Revenues for the full year of 2020 were $49 million compared to $13 million in 2019.

Revenues for the period were comprised of $32 $1 billion in sales of the Juba.

$16 $4 million and sales of off two respectively.

The increase in revenue was primarily driven by the success of China commercial launches of the jeweler and opportune in late January and the churn respectively.

Unknown Attendee: Thank you, Jonathan. I will now review our financial results for the full year ended December 31st, 2020. Revenues for the full year of 2020 were $49 million, compared to $13 million in 2019. Revenues for the period were comprised of $32.1 million in sales of Tejula. The increase in revenue was primarily driven by the successful Chinese commercial launches of Zijula and Optune in late January and late June respectively.

R&D expenses were $222 $7 million for 2020 compared to $142 $2 million in 2019.

The increase of R&D expenses was primarily attributable to the new licensing agreements and ongoing of newly initiated late stage clinical trials, along with payroll and payroll related expenses from increased R&D headcount and expansion of the research efforts to support internal development programs.

Selling general and administrative expenses were $111 $3 million for 2020 compared to $72 million of 2019.

The increase was primarily due to payroll and payroll related expenses from the increased commercial headcount and related costs as we launched the jeweler and obviously in China and continue to invest in our commercial platform for the future growth.

For the full year of 2020 Xylem reported a net loss of $268 9 million for a net loss per share attributable to common stockholders of $3, 46% compared to the net loss of $195 $1 million for a net loss per share attributable to common stockholders of $3.03.

Unknown Attendee: R&D expenses were $222.7 million for 2020 compared to $142.2 million in 2019. The increase in R&D expenses was primarily attributable to new licensing agreements and ongoing and newly initiated late-stage clinical trials, along with payroll and payroll-related expenses from increased R&D, and expansion of research efforts to support internal development. Selling general and administrative expenses were $111.3 million for 2020 compared to $70.2 million in 2019. The increase was primarily due to payroll and payroll-related expenses from the increased commercial headcount and related costs as we launched Cedula and Opti in China and continue to invest in our commercial platform for future growth.

For the full year of sort of 19.

As of December 31st 2020, cash the cash equivalents short term investments and restricted cash totaled $1, one 9 billion compared to $276 $4 million out of the December 31st 2019 the.

The increase was primarily due to a secondary listing on the main board of the stock exchange of Hong Kong with total proceeds before deducting underwriting fees and commissions the other operating expenses of the.

Ultimately the $881 million.

We would now like to turn the call back over to the operator to open up the lines for questions operator.

Thank you ladies and gentlemen, we will now begin the question and answer session.

If you wish you asked the question. Please press star one on your telephone and liked for your name to be announced if you wish to cancel your request. Please press the pound or harsh key.

Please limit to one question and one follow up at the time, if you have follow up questions. Please request to rejoin.

Once again this style of one for questions.

The first question comes from ego from Citi. Please go ahead.

Unknown Attendee: For the full year of 2020, Zai Lab reported a net loss of $268.9 million, or a net loss per share attributable to common stockholders of $3.46, compared to a net loss of $195.1 million, or a net loss per share attributable to common stockholders of $3.03, for the full year of 2019.

Hi, This is carly on for Yigal, Thanks, very much for taking our questions.

The start on the organic still assuming a favorable outcome from the regulatory discussions for myasthenia gravis could you talk about how quickly you expect to be able to file the NDA and then alternatively, if the agency where the required.

Yeah. The conduct of breaking study can you talk about what the timeline might look like under that scenario.

Unknown Attendee: As of December 31, 2020, cash and cash equivalents, short-term investments, and restricted cash will total $1.19 billion, compared to $276.4 million as of December 31, 2019. The increase is primarily due to our secondary listing on the main board of the Stock Exchange of Hong Kong with total proceeds before deduction of underwriting fees and commissions and other offering expenses of approximately $881 million. We would now like to turn the call back over to the Operator to open the line for questions.

Thank you for the question.

This is a month of tools.

We are currently are of course are just started the discussion process.

And the.

So hard for us to give him and her.

The I agree the untracked.

Answer to this question.

But we do believe our guests.

I forgot the PA.

Program, especially the one for the first indications TMT.

The definitely address so for me this unmet.

In the medical needs.

And it's also the first one and the two of the market.

Unknown Attendee: Operator? Thank you. Ladies and gentlemen, we will now begin the question and answer session. If you wish to ask a question, please press Star 1 on your telephone and wait for your name to be announced. If you wish to cancel your request, please press the pound or hash key.

So we have a we are optimistic about the regulatory discussion and the other com. Thank you.

Okay, great. Thank you and then switching gears to ever Pratt net.

The commercial launch for <unk>.

Yes. This year can you just kind of what learnings you've gathered from launching because of July an option that you believe will position us for the refractive watch and if you could just provide some color on how concentrated the market is in China and how many sales reps do you expect the higher to execute the launch that'd be really helpful. Thank you.

Operator: Please limit to one question and one follow-up at a time. If you have follow-up questions, please request to rejoin. Once again, it's Star 1 for questions. Your first question comes from...

Operator: Your first question comes from Igo from Citi. Please go ahead. Hi, this is Carly on.

Did he do like all of a question.

Yes sure.

For the question Yeah, we've learned a lot last year of U S launch successfully both for two of the in late January.

Operator: Unsponsored ADR Unsponsored ADR Unsponsored ADR

Operator: Assuming a favorable outcome from regulatory discussions for myasthenia gravis, can you talk about how quickly you expect to be able to

And up to which made it which was made commercially available at the last day of June and despite the pandemic I think of you know we're quite pleased.

With the E.

The commercialization of episodes for so we look for very much for them to carry that momentum into the new year and this will be the first full calendar year for both of those products, but that's your specific question about how that relates to.

Operator: Unsponsored ADR

Ying Du: Thank you for the question. This is Samantha Du.

Ying Du: We are currently, of course, just starting the discussion process, and it's a very hard for us to give you an accurate answer to this question. But we do believe this EFCOS program, especially the one for the first indication, TMG, and definitely addresses significant mathematical needs, and it's also the first one to the market. So we're optimistic about the regulatory discussion and the outcome. Thank you. Okay, great. Thank you. And then I'm switching gears to Repretneb and the potential commercial launch of Fourthline this year.

Separation for too long, Yeah, I mean, there is definitely a center of.

Parallels.

So it is our first gastric cancer.

Out of lunch, however, the market access for trucks.

Addressing the unmet clinical need.

You know, it's very concentrated in China. So we expect some sort of similar.

You know the dynamics are in the Chinook as well. So you may have seen in our earnings release that we just got approval in Hong Kong.

And of course, we have in our.

As part of the most of them.

For a mainland China launch in the first half of this year. So you know I think of you know we look very much forward to the launch and we've been doing a lot of preparation for another success.

Operator: I'd like to know what learnings you've gathered from launching Zajula and Optune that you believe will position you well for the representative launch, and if you could just provide some color on how concentrated the GIST market is in China and how many sales reps you expect to hire to execute the launch. That would be really helpful.

Thank you. Our next question comes from Michael <unk> from Jefferies. Please ask your question.

Hi, Good morning. This is Dennis thing on for Mike. Thanks for taking the question I just have two.

First one is.

Just about your appetite for deals for the rest of the this year and if we should expect the greater focus on autoimmune or perhaps non oncology area of snow. After Iconix for my second question is on just around your comments around globalization I think.

Operator: Unsponsored ADR Really, do you like to move forward with a question?

Unknown Executive: We were to successfully launch both Sejula in late January and Optune, which was made commercially available on the last day of June. And despite the pandemic, I think, you know, we're quite pleased with the commercialization so far. So we look very much forward to continuing that momentum into the new year, and this will be the first full calendar year for both of those products. But as to your specific question about how that relates to, you know, our preparation for this Chinlock, yeah, I mean, there are definitely some parallels.

You guys have an internal goal to the of global company by 2023.

You envision yourself as the global company and what possible paths can you take to achieve that thank you.

Thank you Dennis and let me turn the first question over to all of our head of business development jumps in law.

Hi, Dennis Thank you for the question.

First of all we have a very robust BD pipeline.

Nothing really credit to all of the strike execution by the development commercial and other teams.

We have really built a reputation in the trust within the community you know of biotechs and pharma shadow of companies around the world.

So today, we have really a lot of inbound interest to partner not only oncology immunology, but perhaps other areas as well so for US you know, we're looking always for significant deals that would really boost the alpine of potentially first in class and best in class. We have always have a very high standard.

Unknown Executive: So it is our first gastric cancer product launch. However, market access for drugs for addressing unmet clinical need is very concentrated in China. So we expect some similar, you know, dynamics in Chinlock as well. And you may have seen in our earnings release that we just got approval in Hong Kong. And of course, we have in our pipeline as part of a milestone for a mainland China launch in the first half of this year. So, you know, I think, you know, we look very much forward to the launch. And we've been doing a lot of preparation for another success.

For whatever assets that we're bringing lost share I think we established quite a number of very significant partnerships with great companies around the world. So we see we will potentially you know.

Continues this trend.

Trend of always executing every single year to your specific question about all the immune I'm you know when we bought U S. God that is really an anchor asset for us.

Operator: Thank you. Our next question comes from Michael Yee from Jefferies. Please ask your question. Hi, good morning. This is Dennis Ding for Mike.

To build out immunology franchise I'm of course, we have other products in our immunology franchise, including our own in house Discovery program, the narrow body, our 17, which we developing this globally.

Operator: Thanks for taking the question. I just have two. The first one is, you know, just about your appetite for deals for the rest of this year and whether we should expect a greater focus on autoimmune or perhaps non-oncology areas now after Argenix. And my second question is about your comments on globalization. I think you guys have an internal goal to be a global company by 2023. How do you imagine yourself as a global company? And what possible paths can you take to achieve that? Thank you.

But as Scott is the pipeline of product opportunity you know targeting many very severe autoimmune diseases with lack of with the lack of other treatment options. So I think all of the similar products. We're certainly very open to what as we look to you know strength in our pipeline and in different areas.

Yeah to answer your question about globalization.

First of all I think time as you know it's already the second largest global market.

So taking care of of China patient is actually is up by itself is already our second largest market, which is very important.

Operator: Thank you, Dennis. Let me turn the first question over to our Head of Business Development, Jonathan Wang.

Jonathan J. Wang: Hi Dennis, thank you for the question. First of all, we have a very robust BD pipeline. I think credit really goes to the strong execution by the development, commercial, and other teams. We have really built a reputation and a trust within the community of biotechs and pharmaceutical companies around the world. So today we have really a lot of inbound interest to partner not only in oncology and immunology but perhaps other areas as well. So for us, we're always looking for significant deals that would really boost our pipeline of potentially first-in-class and best-in-class.

And as you can see from all of our newest cover of our earning release we have.

The loans three therapeutic areas and covered by a multiple of strong franchises, especially in oncology you're looking if you look at our gastric cancer and lung types of franchises they are huge.

Cover total of half of the concert new incidents in China.

That alone will actually in terms of gave us the Oh I would say top site right. That's the long China, along with what the gave US a tremendous upsides of course, we also have oh the over the last six years.

In total discovery, we have three assets already global in the global Phase III development with the club with worldwide rights and though we will continue over the next three years to build all of our franchise both eyes of Jones of sad vertically horizontally, but.

Jonathan J. Wang: We always have a very high standard for whatever assets that we bring in. Last year, I think we established quite a number of very significant partnerships with companies around the world. So we see we will potentially continue this trend of always executing every single year.

Both within China and beyond China, So we are low.

The very Oh, we are optimistic about all of our filter of being the global either.

Unknown Executive: To your specific question about autoimmune diseases, when we brought in FGARD, that is really an anchor asset for us to build our immunology franchise. Of course, we have other products in our immunology franchise, including our own in-house discovery program, the Nanobody R17, which we're developing globally. But FGARD is a pipeline of product opportunities targeting many very severe autoimmune diseases with a lack of other treatment options. So I think other similar products will certainly be very open to it as we look to strengthen our pipeline in different areas.

Thank you next question comes from Siemens Fernandez from Guggenheim. Please go ahead.

Oh, thanks very much for the question. So I wanted to just get a sense of.

And the second line market in China.

You guys could just give us a quick sense of that and how the competitive landscape continues to evolve.

And if you don't mind I'd love to just ask the CDC seven mm for you guys to talk a little bit about the mechanism of action and exactly.

What you were targeting I know that this is targeting ADR, but are.

Ying Du: Yeah, to answer your question about globalization. First of all, I think China, as you know, is already the second largest global market. So taking care of Chinese patients is actually, by itself, already the second largest market, which is very important. And as you can see from our early release, we have three therapeutic areas and are covered by multiple strong franchises. Especially in oncology, if you look at our gastric cancer and lung cancer franchises, they are huge, and they cover a total of half of the new cancer incidents in China.

The key tumor types that you're most excited the C. D C R.

As for the CDC seven advancing an.

Thanks, so much.

I think you'll see them of those are great questions for you.

First one and I'll turn it over to Philippe the Tau antibody.

The second one out the gate offer president of oncology development Doctor Island, the central our opportunity to address thank you.

Hey, Jamie Thanks for the question Oh Jeez no other.

For the launch of the jewel of last year.

What are the hospitals.

Of the coverage, although as you know we talked about Cushing.

The action.

There's going to be especially because we want to think of the broader and now we're continuing to deepen.

Ying Du: So that alone, actually, in terms of giving us the, I would say upside, right, that's a long Chinese loan, it would give us a tremendous upside. Of course, we also have, over the last six years, internal discovery; we have three assets already in global phase one development with globe with worldwide rights. And we will continue over the next three years to build our franchise, both, as Jonathan said, vertically and horizontally, but both within China and beyond China. So we have a very, we are optimistic about our future being a global leader.

The coverage into those hospitals.

And he has what he loves to do low we had about 150 sales reps.

The other needs all of that.

Of course.

Patients of the IPO of.

Implementation.

So starting basically.

Today, our you.

The the implementation date.

No you should expect us to accelerate the.

The hospital listings in China, we were already.

Don't really publicly disclose it but across the.

The major metrics and Kpis.

We're quite pleased with how we've been performing I can say that you are.

Set up the benchmark across all of those metrics.

So.

I think to your second question of.

The total tally yeah.

Yeah, Hi.

Thanks for the thanks for the question so.

Operator: Thank you. Our next question comes from Seamus Fernandez from Guggenheim. Please go ahead.

C D G seven with selective inhibitor of done.

It is involved in replication stress.

Operator: Oh, thanks very much for the question. So I wanted to just get a sense of penetration in the second line market in China. If you guys could just give us a quick sense of that and how the competitive landscape continues to evolve. And if you don't mind, I'd love to just ask the CDC7, can you guys talk a little bit about the mechanism of action and exactly what you're targeting? I know that this is targeting ATR, but what are the key tumor types that you're most excited to see ATR or CDC7 advancing in? Thanks so much.

And it also but didn't do send cell division.

In addition, the.

What we're going to be doing the conducting in our early phase early studies you can look at some.

Areas, where we might be have the biomarker driven.

Attempts at the different malignancies, such as pancreatic cancer, which looks like of potential target as well. So at this particular round of time, they're not the.

We're still evaluating what the potential malignancies would be best and we'll do that in a broad fashion early on and then the direct more of as we learn more from our biomarker driven studies.

Unknown Executive: Thank you, Seamus. Those are great questions. For your first one, I'll turn it over to Billy Cho. For your second one, I'll give our President of Oncology Development, Dr. Alan Sandler, an opportunity to respond. Thank you.

Thank you.

Thank you. Our next question comes from and the Palm Rama from J P. Morgan. Please ask your question.

Hi, guys. Thanks, so much for taking the question.

Just a quick one for me.

Unknown Executive: Hey Jamie, thanks for your question. You know, as you know, at the time of our lunch, as we do a lot of our lunches here. Unsponsored ADR Unsponsored ADR. So, Alan, I think about your second question, I'll...

I've mentioned the nor are results of couple of times on this call for the July can you remind us two parts one how the nor our results are being used in commercialization and then two are there plans to submit the nor of data to regulators for inclusion in the in the label. Thanks. So much.

Yes.

Unknown Executive: Yes, hi. Thanks.

Thank you and the palm.

And the like Paul to address your question.

Unknown Attendee: Thanks for the question. CDC-7 is a selective inhibitor and is involved in replication stress. And it also would induce cell division inhibition.

And the if.

I mean Congress the additional comments needed I'll just make it up.

Unknown Attendee: What we're going to be doing in our early studies is to look at some areas where we might have biomarker-driven attempts at different malignancies, such as pancreatic cancer, which looks like a potential target as well. So, at this particular time, they're not, we're still evaluating which potential malignancies would be best. And we'll do that in a broad fashion early on and then target more as we learn more from our biomarker-driven studies.

Yeah, Yeah. Thank you of sometimes the a lot.

Out of home. Thanks for the question I think the door of study is pretty important to us because of its itself of.

China specific of study and its very large as you may know in the <unk>.

The study, we really prove the that.

As of July.

When do the other individualized starting dosing regimen can significantly improve the side effect profile well.

Preserve efficacy and that really kind of fits in into the bad debt the majority.

Unknown Executive: Thank you. Thank you. Our next question comes from Anupam Rama from J.P. Morgan. Please answer the question.

Jordan of the Chinese patients, it's also important to point out.

In the more of the study we observed.

The 18 months of PFS versus <unk>.

Operator: Hi, guys. Thanks so much for taking the question. Just a quick one from me. You guys mentioned the NORA results a couple times on this call about Zajula. Can you remind us two things? One, how the NORA results are being used in commercialization? And then two, are there plans to submit the NORA data to regulators for inclusion in the label? Thanks so much.

12 months in the the global mobile study. So these are all very significant with vault.

I think the work hard lab utilizing.

In all of our commercialization efforts in China.

Yes.

Yes in terms of labor and the other pumps for the information all of the first line was approved based on 200 milligrams instead of 300 milligrams.

Also where are you in the work to.

The change of the labeling from 300 milligram starting dose of 200.

Tao Fu: Thank you Anupam, and I would like Tao to address your question, and if any additional comments are needed, I will just make it up.

Great. Thank you. Our next question comes from Jonathan Chang for Graham as VEB Leerink. Please go ahead.

Tao Fu: Yeah, yeah, thank you, Samantha. Anupam, thanks for the question. I think the neural study is pretty important to us because it is a China-specific study, and it's very large. As you may know, in the neural study, we really proved that, you know, Zodula, when used when other individualized starting dosing regimens can significantly improve the scientific profile while, you know, preserving efficacy. And that really kind of fits in with the majority of Chinese patients.

Hey, guys. This is David Russo on for Jonathan Thanks for taking our questions and congrats on the OSM progress this year.

Just one for me you guys are partnered with Macrogenics on module B of the mahogany study of margin talk to him out of in frontline gastric cancer Macrogenics has guided to presenting data for module a in the first half of the year and I was just wondering if you could talk about what you would be looking for in that dataset.

To give you confidence in module b.

Terms of response rates or any other durability data. Thank you.

Thank you, David and I'll turn this over to Paul.

Tao Fu: It's also important to point out, you know, in the neural study, we observed almost 18 months of PFS versus 12 months in the global NOVA study. So these are all very, very significant results, you know, I think we're currently utilizing in our commercialization effort in China.

Yeah. So thanks for the question so module a of the the mahogany trial as you know is the the chemo free regimen.

We think this is.

Also pretty interesting for us and important for the first line gastric cancer patient for the moat for a chemo free.

Ying Du: Yes, in terms of labeling and Anupam, for your information, our first line was approved based on 200 milligrams instead of 300 milligrams.

The regimen versus just chemotherapy.

So we will be certainly looking for response rate.

You know if we observed a really good response rates.

Operator: Unsponsored ADR

Operator: Also, we are in the process of changing the labeling from 300 mg at the starting dose to 200 mg.

We believe this will also be very good read through to the module b.

Which will include a checkpoint inhibitor.

Operator: Right, thank you. Our next question comes from Jonathan Chang from SVB Leering. Please go ahead. Hey guys, this is David Rue, Sean Kerr, Jonathan, thanks for taking our questions and congratulations on the awesome progress this year. Just one from me.

Yeah.

Awesome. Thank you.

Thank you. Our next question comes from the E. Chen from Goldman Sachs. Please ask your question.

Thank you for taking my questions I actually kind of two questions for.

First if the look at the financial data right. The gross margin was a lot lower in second half versus the first half.

Operator: You guys are partnering with Microgenics on module B of the mahogany study of margitoxin-matted frontline gastric cancer. Microgenics is guided to presenting data from module A in the first half of the year. And I was just wondering if you could talk about what you would be looking for in that data set to give you confidence in module B in terms of response rates or any other durability data. Thank you.

The 61% versus 74% and half first half trying to understand what's the reason behind.

And also we are interesting and upcoming opportune, a phase III pivotal and new net studies, which.

Just going to have some interim data coming probably second half this year, so what kind of for the interim data we should be expecting of you will consider as part of those signals and part of cool. It given the study is planned to show superiority.

In interest of OS benefit.

Tao Fu: Thank you, David. And I'll turn this over to Tao.

For the combo with immunotherapy Council with some ducks tactful combination. So do you need to show the superiority of impulse combo arms or you just need to show of the severity and the just one of the answers. Thank you.

Tao Fu: Yeah, so thanks for the question. So Module A of the mahogany trial, as you know, is the chemo-free regimen. You know, we think this is also pretty interesting for and important for first-line gastric cancer patients to look for a chemo-free, you know, regimen versus just chemotherapy. So we will be, you know, certainly looking for response rates. You know, if we observe a really good response rate, we believe this will also be a very good lead for Module B, which will include a checkpoint inhibitor.

Hello tree of good the good evening and the out of town first question to Tom.

And the second question Oh, No sorry first question to offer C. F O B the tall second question true powerful.

Yeah, Hey, do you ask your question about the second half margin.

That's it for.

We can say that debt.

There is some variability in second half because of the two things you just had launched of up to as I mentioned at the last day of June.

So it's just getting the started.

Operator: Awesome, thank you. Thank you. Our next question comes from Ziyi Chen from Goldman Sachs. Please ask your question. Thank you for taking my questions. I actually have two questions. Unsponsored ADR Unsponsored ADR

Inventing and then the other sort of sort of nonrecurring variability.

The point would be at the end of band of Anr deal implementation of Yoga. You also should expect to see a little bit of the you know very guilty right before the trial gets kind of gets implemented into the national kind of blocks.

So.

What I'm trying to say is that there's some.

Operator: Hello Ziyi, good evening. And I'll turn your first question to Tom. And the second question, oh no, sorry, first question to our CFO, Billy Cho, second question to Tao Fu.

You know those are the two factors of the.

Could have led to that.

Hopefully you can you just clarify your second question of at Musselwhite, the capture of the pool of.

And we're expecting the opportunity phase III pivotal of Luna studies, so it's gonna be of interim data right. So what kind of threshold with the low Kim the data to hit consider at the positive signal for for for the Phase III Studies and also I know the.

Unknown Attendee: Unsponsored ADR Unsponsored ADR So, you know, what I'm trying to say is that there are some, you know, those are the two factors that could have led to. Hi Ziyi, can you just clarify your second question? I'm not sure I captured it fully, but we're expecting the up to phase three pebble Luna Unsponsored ADR, looking at the data to hit, consider as a positive signal for the phase three studies. And also, I know the study actually is comparing the combination with immunotherapy or a combination with doxytaxel versus immunotherapy or doxytaxel. So do you need to show the superiority of both combo arms?

Study actually is comparing the combination with immunotherapy or combination with stocks of tocqueville versus chemotherapy or the alphatec. Phil. So do you need to show the superiority of impulse combo arms or you just need to show like shipyard in.

Either one of the arms.

Yes.

Yeah I think this is probably a question that we should be for two novel cures clinical team to answer.

We do think this is a very important trial for for China, because there's a very large unmet medical need for non small cell lung cancer and this is a very unique approach and differentiate won't modality, but.

Tao Fu: Or you just need to show superiority in, you know, either one. Yeah, I think this is probably a question we should defer to NovoCure's clinical team to answer. But we do think this is a very important trial for China because there's a very large medical need for non-small cell lung cancer. And this is a very unique approach and differentiated modality. But in terms of the trial details, I think we'll probably refer to NovoCure to answer that.

Terms of the trial details I think it will be probably referred to novocure.

Sure.

Thank you.

Yeah.

Yeah.

Alright. Thank you Oh next question comes from young Kwon from Credit Suisse. Please ask the question.

Thank you. So my first question is of the.

SAS for of the July and the false true when you have sales coming from mainland China and the Hong Kong of my call for kind of give us a breakdown for the.

Of true sales in terms of all four of mainland China and also the mainland China ourselves for true.

Operator: Thank you. Right, thank you. Our next question comes from Yang Huan from Credit Suisse. Please ask a question. Thank you.

The San so all I can say the because I'm up through the first half of last year of channel sales is about the 5 million right, we're saying huh.

Operator: So my first question is, since for the Joola and for Optune, we have sales coming from mainland China and Hong Kong and Macau, can you give us a breakdown for Optune sales in terms of mainland China and also sales in mainland China for Optune? Since I consider, for example, Optune in the first half of last year, Optune sales were about 5 million. Then if we think it will continue in Hong Kong and Macau as 5 or 6, that doesn't mean for the second half. In mainland China, optimum sales were about 5 million USD.

It will continue in Hong Kong on my call as five or six that doesn't mean for.

For the second half.

Mainland China up to your own sales was about a five minute of Rusty.

Okay.

Hey.

Okay.

Good day.

Yeah.

Good day pretty close.

Okay.

Hum.

Hong Kong and the greater.

The market outside of Japan, I should say of.

Has been very strategic for us historically, especially for Hong Kong.

We were able to launch the children often in advance of a.

And then in time of launch.

And of course, I mentioned this morning of people.

Okay.

Oh.

So I think but going forward of the reason why the did not break out by the phone call them versus maybe versus even the total impulse.

Unknown Attendee: Hey. Go ahead, Lily. Yeah. Hey, Yang. Thanks for your question. Yeah, Hong Kong and, you know, the greater, Unsponsored ADR. So, you know, I think going forward, the reason why we did not break out.

Net of China.

It's a pretty substantial.

Right.

For us, though as we move forward.

So we have decided not to really take off of geography.

Oh, okay. Okay.

So my second question is the still kind of related to opt to them.

So we're indicated for Tonight in the war and we're all going to join the some global phase III are up to in the study like non small cell lung cancer and pancreatic cancer trial.

Operator: Unsponsored ADR Okay, so my second question is still kind of related to OpTune. So we indicated that for 2021, we are going to join some global phase three OpTune studies, like in non-small cell lung cancer and pancreatic cancer trials. But it doesn't mean that after we participate in a phase three trial, if those trial results are positive, we can direct,

It doesn't mean that after will participate in the phase III trial. There for those trial results are positive for kind of directly.

Apply for share indication for up to them.

China.

The way it still need for some kind of localize the started it sounds like operating and started for drugs.

<unk>.

Operator: Thanks, Yang. Good evening.

Thanks Young Gar good evening this is for myself.

Unknown Executive: This is Martha, and I think the point of joining Global Study is several reasons. Number one is to accelerate the global development timeline. Number two is to fast-track China's regulatory program. So from what we know right now, we think combined with global approval, together with China, the patient's data from the global trial should be according to the current regulatory guidelines will be sufficient. But if things change, we can update you.

And the.

I think the point of joining global study right.

The several reasons number one it's the salary at the global development timeline.

The two is fast tracked China regulatory approval. So from what we know right now we think of combined with the global approval.

Together with China's.

You know the.

The patient data from the global trial, so it should be social site. According to the current regulatory.

Guidelines will be sufficient.

But I think if things change with the other day true.

Operator: Thank you. Our next question comes from David Lee from Bank of America, Merrill Lynch. Good.

Yeah.

Thank you. Our next question comes from David Li from Bank of America Merrill Lynch. Please ask the question.

Operator: Thanks, management, for giving me the chance to ask you questions. I would like to know more about your margin, especially when we did a very simple calculation. It seems like your gross profit margin for 2020 is only 66%. So we understand it is a mix because you have both Part 1 and Option 1.

Right. Thanks management is giving me the challenge to ask the questions.

I would like to know more about your margin, especially when.

When we did at the very very simple calculation it seems like the gross.

Gross profit margin for 2020 is only.

The 6% so we understand it of the needs because of the you have got a boost popcorn and offshoring that Tom It seems like the margin can I confirm this margin has not been projected.

Operator: But it seems like the margin, can I confirm this margin has not been projected, has not been negatively impacted by the national negotiation, which happened just by the end of December last year. And going forward, this margin is going to be lower because of the negative price cut in 2020. And also, it seems like 66% is not that attractive, even compared with the genomic drugs in China.

Not being negatively impacted the by the national negotiation, which happened just to by the end of December last year and going forward going forward. This margin is going to the starting to be lower.

Because of the negative price cost in place in 2020 and also it seems like 66% margin is is not that attractive even compared with the generic drugs in China can you help us to have a more kind of in this this is my first question. Thank you.

Operator: Can you help us to have more color on this? This is my...

Ying Du: My first question. Thank you. First of all, thank you, David, and good evening. And I think, first of all, I have to say, compared to generics, this margin is very small. I would like our CFO, Billy, to answer your detailed questions.

First of all thank you David and good evening.

And I think of this.

The first of all I have to say.

Comparator of generics this margin.

The attractive.

But I would like and like all of our CFO Julie to answer your other detail question.

Unknown Attendee: Yeah, hey, David. Hope you're well.

Yeah, Hey, David I hope, you're well basically the question unless if you picked up on the the previous question from young but if that's the question that could be similar.

Unknown Attendee: Thanks for your question. I'm not sure if you picked up on the previous question from Yang. But on that question, yeah, pretty similar.

And and that's the second point, but you know maybe I missed what the.

Variability for us.

All of the energy all of inclusion and that's something that you may see a sort of.

Unknown Attendee: And the second point that, you know, maybe you had missed was that, yeah, there was variability from the NRDL inclusion. And that's something that you may see, sort of, outside of Zai Lab as well, right? So, you know, right now, we're not giving guidance on our margin profile, given that, you know, we're still very much early on in wrapping up, and the product mix is going to change.

Outside of the sign up as well right.

So right now, we're not giving guidance on our margin profile.

Given the.

So we're still very much early on.

Wrapping up and the product mix is going to change and we're right now focused on debt.

Yeah, we have.

Some of your products and you know a lot more indications of debt coming down for the next three even for you like the.

Execute according to our plan so the.

We're very much sort of growing very very fast but.

We're not yet keeping the same.

It's on the margin.

But I mean I want to echo what the menthol also chipset and the the I'd say the interim gross margin you also have to remember that that's what we also recognize the royalty.

In order to have.

And for example of comparison you would have to look at the overall the margin profile of the business.

Unknown Attendee: And we're right now focused on, you know, we have, you know, 10 additional new products and, you know, a lot more indications than that, you know, coming up over the next three, even, you know, four years if we execute according to our plan. So, you know, we're very much, you know, growing very, very fast. But, you know, we're not yet giving guidance on the margin. But, I mean, I want to echo what Samantha also just said, in that, you know, I think, you know, in our gross margin, you also have to remember that that's where we also recognize the. In order to have an applicable comparison, you would have to look at the overall margin profile of the business, generic versus innovative. Unsponsored ADR

Generic versus the innovator.

Right I gotcha.

Also offsets yeah Oscar.

Oscar the follow up question.

In total at me the sorry, David Let me cut in quickly I also want the same thing.

Company is still in the very very early stages of investing for.

So where are you investing very heavily in the commercial organization.

And so going forward you may see different margin.

Yeah.

Thank you Samantha.

The first of all of the pipeline get for.

The other guys we'd be the straw the franchise the instead of lung just one product and more and more interest same franchise, you've seen a lot of synergy and I think you'll see also different.

Again I want to emphasize we're in early development are very heavy.

Topline girl of topline lessening the stage and we are also launching one for true like lost share to products and each of them one is the.

Ying Du: Sorry David, let me cut in quickly. I also want to say the company is still in a very, very early stage of investment. So we're investing very heavily in a commercial organization. And so, going forward, you may see different margins.

Actually of less than two quarters, one is less than three quarters, so with that and the way a wave of believe for us going forward of our skilled trades very very optimistic.

Operator: Unsponsored ADR Unsponsored ADR Unsponsored ADR

Operator: Got you. Very clever. Can I ask a follow-on question? So do you feel the margin pressure after considering the price cut by the end of last year and also the price and also the competition with Henry's pop-on inhibitor this year in terms of the margin perspective? Thank you.

Okay.

Gotcha very class Oh can I ask a sort of one question. So how do you see the margin pressure.

After considering the.

The price cash.

But as you know.

Last year and also it was up price and also the the competition was with Henry <unk>.

The top one inhibitor in this year and in terms of the margin per sector. Thank you.

Ying Du: Thank you, David. First of all, Henry's approval is on the third line for the POP inhibitor. It's not on the first line, and it's not on the second line.

Thank you there the.

First of all.

Henry the approval is in the third line.

For the for the PARP inhibitor its not in first line. It's now the second line.

Operator: Secondly, our second line is already in the NRDL. Even though there will be price cut, and considering how much volume will pick it up, we really think it's more positive, much more positive. That's why we had the choice to be in the NRDL or not in the NRDL. We did ample calculation on the pharma economics. So we came out, agreed on an RDL listing and must have a good reason. And lastly, I want to emphasize, we are the only one. So the first line is all commerce status, regardless of whether you are HRD mutation or you're GBRECA. And we look forward to see other companies to show this kind of data, and we

Secondly, all of our second line is already in the NRT al.

Even though there will be price cost and the considering how much volume will pick it off.

We really think it's more positive my small part of that.

That's why we had we had the choice to.

B in the NRT or not in the not the L would be the poll the calculation on the farmer economics. So we came off a great al Nardi, our listings and must have a good reason.

And lastly.

Lastly, you we work you're talking about I want to emphasize we are the only one for the first line all comers status for <unk>.

That's all for Oh, whether you are the.

HRD mutation all of you.

T Broadcom and that way look for to see other companies. The shoal, that's kind of day huh.