Q1 2022 Zai Lab Ltd Earnings Call
Operator: Today's conference is scheduled to begin shortly. Please continue to stand by.
Today's conference is scheduled to begin shortly please continue to standby. We thank you for your patience. Today's conference is scheduled to begin shortly please continue to standby. We thank you for your patience.
Operator: We thank you for your patience. Today's conference is scheduled to begin shortly. Please continue to stand by.
Operator: We thank you for your patience. Unsponsored ADR Unsponsored ADR Unsponsored ADR Unsponsored ADR Unsponsored ADR Unsponsored ADR Unsponsored ADR Unsponsored ADR Unsponsored ADR Unsponsored ADR, Unsponsored ADR Unsponsored ADR Unsponsored ADR Unsponsored ADR Unsponsored ADR Unsponsored ADR Unsponsored ADR, Hello, ladies and gentlemen, thank you for standing by and welcome to Zaii Lab's first quarter 2022 financial results conference call. At this time, all participants are in the listen only mode.
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Operator: Later, we will conduct a question and answer session, and instructions will follow at the time. As a reminder, today's call is being recorded. It is now my pleasure to turn the floor over to Billy Cho, Chief Financial Officer of Zai Lab, who will make introductory comments. Thank you, operator. Good morning, good evening, and welcome, everyone.
Hello, Ladies and gentlemen, thank you for standing by and welcome to find that the first quarter 2022 financial results Conference call. At this time all participants are in a listen only mode. Later, we will conduct a question and answer session and instructions will follow at the time and so.
As a reminder, today's call is being recorded.
It is now my pleasure to turn the floor over to Billy Cho, Chief Financial Officer, Oh, Sorry lab, who will make introductory comments.
Thank you operator.
Good morning, good evening and welcome everyone.
I Love recently issued a press release, providing the details of the company's financial results for the first quarter ended March 31, 2022, as well as product highlights.
The press release is available in the Investor Relations section of the company's corporate website at IR Dot pilot before he got caught.
Billy Cho: Zai Lab recently issued a press release providing the details of the company's financial results for the first quarter ended March 31, 2022, as well as product highlights and corporate updates. The press release is available in the Investor Relations section of the company's corporate website at ir.zailabtory.com. Today's call will be led by Dr. Samantha Duke, Zalab's Founder, Chairperson, and Chief Executive Officer. She will be joined by Dr. Alan Sandler, President and Head of Global Development Oncology, who will discuss advances with our oncology product.
Today's call will be led by both of US not to do so Alex founder Chairperson and Chief Executive Officer she'll be joined by Dr. Alexander President and head of global development oncology.
We'll discuss advances with our oncology product candidates.
Billy Cho: Dr. Harold Reinhart, President and Head of Global Development, Neuroscience, Autoimmune, and Infectious Diseases, will speak about progress we have made in those three therapeutic areas, and I will discuss the performance of our market products and conclude with comments on our financial results. Additional executives will also be available to answer questions during the Q&A portion of the meeting. As a reminder, during today's call, Zai Lab will be making certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including our business plans and objectives, and the timing and success of our clinical trials, our sales and revenue forecast for our product and product candidates, regulatory applications, and commercial launch. These 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 alternatives.
Brian Hart, President and head of global development, neuroscience, autoimmune and infectious diseases.
Speak about progress, we are making those three therapeutic areas and I'll discuss the performance of our marketed products and conclude with comments on our financial results.
Additional executives will also be available to answer questions. During the Q&A portion of the call.
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 1995, including our business plans and objectives and timing and its effects of our clinical trials, our sales and revenue forecast or products and product candidates regulatory applications and commercial launches.
The 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 actual results could differ materially from what we expected due to a variety of factors, including those discussed in our SEC filings.
John S. Fowler: Actual results could differ materially from what we expect due to a variety of factors, including those discussed in our SEC filing. At this time, it is my pleasure to turn the call over to John S. Fowler, Chairman and Chief Executive Officer, Dr. Samantha Du. Thank you. Hello, everyone, and thank you all for joining us today. Our first quarterly ballot. For your slash prize. Checklist. System execution. Where is Mark Bethle?
At this time, it's my pleasure to turn the call.
<unk> chairperson and Chief Executive Officer, Dr. Samantha Du.
Thank you Brittany.
Hello, everyone.
Thank you all for joining us today.
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Unknown Speaker: Unsponsored ADR, Knobo, Knobo, Unsponsored ADR, staff, we have paid. Unsponsored ADR, The Global Capital Market. Knowledge Checklist: Consistent Execution, Improving Global First Investing Class to patients in China and beyond. We at Sun Life remain committed to unsponsored ADR worldwide and building a leading global biopharmaceutical company. Now I'd like to turn the call over to Dr. Alan Sandler. Allen, Thank you, Samantha.
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Alan.
Thank you Samantha.
Dr. Alan Sandler: Zai Lab's oncology franchise continued to make progress in the first quarter, and we expect to have a busy and productive remainder of 2022. As Samantha mentioned, most recently, we unveiled initial preclinical data at the AACR Annual Meeting from key programs within our growing, internally-discovered oncology pipeline. In an oral presentation, the company presented data on our CCR8-targeted antibody ZL1218. ZL1218 is a novel antibody that targets the CCR8 receptor selectively expressed on resident Tregs in solid tumors, and I highlighted the anti-tumor activity of ZL-1218 in an animal model, both as a single agent and in combination with anti-PD-1.
I labs oncology franchise continued to make progress in the first quarter and we expect to have a busy and productive remainder of 2022.
As Samantha mentioned most recently, we unveil initial preclinical data at the ACR annual meeting from key programs within our growing internally discovered oncology pipeline.
In an oral presentation will be presented data on our C. C. R. H targeted antibody Z L 12 18.
Z. All 12 18 is a novel antibody that targets. The C. C. R. A receptor selectively expressed on resident T regs in solid tumors.
I highlighted the anti tumor activity of V. L 12, 18 in an animal model, both as a single agent and in combination with anti PD one.
Dr. Alan Sandler: Additional poster presentations at AACR included preclinical data from our CD47 targeting antibody ZL1201, which is being studied in both advanced lymphomas and solid tumors; CLAUDIN 18.2 specific antibody ZL1211, which has potential applications in gastric and pancreatic cancer; and our highly selective small molecule DNA PK inhibitor ZL2201, which has potential broad anti-cancer applications. In 2022, we plan to submit up to two INDs from our internal R&D platform with the goal of filing at least one IND per year going forward.
Additional poster presentation at ACR included preclinical data from our C. D 47 targeting antibody Z L 12, O one which is being studied in both advanced lymphomas and solid tumors.
Our Florida, an 18 point to specific antibody Z L 12 11.
It has potential applications in gastric and pancreatic cancer.
And our highly selective small molecule DNA PK inhibitor Z L 22, O, one which has potential broad anti cancer application.
In 2022 we plan to submit up to two ind's from our internal R&D platform with the goal of filing at least one I N D per year going forward.
Dr. Alan Sandler: Our late-stage development programs in oncology continue to make progress on all fronts in the first quarter. For Reprotrectinib, we recently announced efficacy data from the Phase I, II, Trident I, Revealing comparable results for ROS1-positive non-small cell lung cancer cohort, in China and Global Clinical Trial Site, in TKI-naive patients in China, the confirmed objective response rate was 91% and 79% for global sites, and TKI pre-treated patients in China, the ORR was 36% in those treated with one prior line TKI compared to 36% for global sites.
Our late stage development programs in oncology continued to make progress on all fronts in the first quarter.
Dr. Alan Sandler: The ORR was 67% in those treated with one prior line TKI and one prior line platinum-based chemotherapy compared to 42% for global sites, and the ORR was 50% in those treated with two prior lines of TKI globally. Unsponsored ADR, Notable, all of those numbers represent confirmed responses. It is encouraging to see this comparative efficacy data analysis exploring clinical trial data from sites in China and globally for Reprotrexanib, a potentially best-in-class drug candidate for patients with ROS1-positive advanced non-small cell lung cancer.
Our repo Tristan, we recently announced efficacy data from the phase one two Trident one study revealing comparable results for Ross one positive non small cell lung cancer cohorts.
In China, and global clinical trial site.
And C T I naive patients in China. The confirmed objective response rate was 91% and 79% for global site.
And T K I pretreated patients in China.
Oh, our our was 36% and those treated with one prior line T K I compared to 36% for global site.
We owe our or was 67% and those treated with one prior line T. K I N. One prior line platinum based chemotherapy compared to 42% for global site.
And the ore was 50% in those treated with two prior lines Teekay I globally compared to 28% for global site.
Notable all of those numbers represents confirmed responses.
It is encouraging to see this comparative efficacy data analysis exploring clinical trial data from sites in China and globally for repo Trek to Nab, a potentially best in class drug candidate for patients with Ross one positive.
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Dr. Alan Sandler: With over 800,000 newly diagnosed lung cancer patients every year in China, non-small cell lung cancer accounts for approximately 85% of the cases, and ROS1 rearrangements occur in 2 to 3% of those patients with advanced non-small cell lung cancer.
With over 800000 newly diagnosed lung cancer patients every year in China, non small cell lung cancer accounts for approximately 85% of the cases and Ross one rearrangement occur in 2% to 3% of those patients with advanced non small cell lung cancer.
Dr. Alan Sandler: The majority of these patients are diagnosed with advanced disease, representing a significant unmet medical need. We will continue to work closely with Turning Point to advance this program to help support non-small cell lung cancer patients in China and around the world. Moving to Zijua, we presented positive results from the phase three prime study of Zijua as maintenance therapy at the Society of Gynecologic Oncology annual meeting in March this year. In the prime study, median progression-free survival was significantly longer for patients treated with norepinephrine compared to placebo. 24.8 months versus 8.3 months for GBRACA mutated, while median PFS was not.
The majority of these patients are diagnosed with advanced disease, representing a significant unmet medical need.
We will continue to work closely with turning points to advance this program to help support non small cell lung cancer patients in China and around the world.
Dr. Harald Reinhart: 10.8 months for the non-GBRAC and mutated patients. The median PFS was 19.3 months versus 8.3 months. Overall survival data was still immature, although there was a trend favoring NARAPRIP at the data cutoff. We believe that the prime study further underscores the status of Zijua as the first and only PARP inhibitor approved globally as monotherapy for all comer patients in the first line maintenance treatment setting. Now, touching briefly on our later stage pipeline, 2022 is poised to be another productive year with important pivotal data readouts, including top-line data from the TT Field's Phase III Pivotal Lunar Clinical Trial and the clinical data update from the adagrassive Phase 2 registration-enabling non-small cell lung cancer cohort of the CRYSTAL1 study.
Moving to the door, we presented positive results from the phase three prime study of the jaw as maintenance therapy at the society of Gynecologic oncology annual meeting in March this year and.
In the Prime study median progression free survival was significantly longer for patients treated with niraparib compared to placebo.
4.8 months versus eight three months.
For G BRCA mutated patients.
Liam PFS was not reached versus 10 eight months for the non G BRCA mutated patients.
Median PFS was $19 three months versus eight three months.
Overall survival data was still immature, although there was a trend favoring niraparib as a data cut off.
We believe that the Prime studies further underscores the status of the July is the first and only PARP inhibitor approved globally as monotherapy for all comer patients and the first line maintenance treatment settings.
Now touching briefly on our later stage pipeline 2022 is poised to be another productive year with important pivotal data readouts, including top line data from the T T fields phase III pivotal lunar clinical trials.
And the clinical data updates from the autograph phase two registration, enabling non small cell lung cancer cohort of the Crystal one study.
Dr. Harald Reinhart: With an abundance of potentially best-in-class and first-in-class products, we're very excited about our oncology pipeline at Zai Lab. And now I will turn the floor over to Dr. Harald Reinhart to discuss progress in our autoimmune and neuroscience therapeutic areas.
With an abundance of potentially best in class and first in class products, We're very excited about our oncology pipeline at xylem.
And now I will turn the floor over to Dr. Harold Reinhart to discuss progress in our autoimmune and neuroscience therapeutic areas.
Harold.
Thank you Alan.
Dr. Harald Reinhart: Thank you, Alan. I'll start with autoimmune diseases and efgatigimod, or its marketed name, VSCAR. In March 2022, Zai Partner Hygienics announced positive top-line data from the Phase 3 ADAPT-SC study, evaluating subcutaneous F-catechemot for the treatment of generalized myasthenia gravis or GMG. sub-Q-EFGATIGIMOD achieved the same amount of IgG reduction as the EFGATIGIMOD IV formulation in GMG patients. Specifically, sub-QFGTGMOD demonstrated Results were consistent across the entire population, irrespective of acetylcholine receptor antibody status.
I'll start with autoimmune diseases and <unk> mode.
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In March 2022 XI partner <unk> announced positive top line data from the phase three adapt S. C study evaluating subcutaneous <unk> mode for the treatment of generalized myasthenia gravis or gmg.
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To achieve the same amount of IGT reduction as he has got to Yamana IV formulation in gmg patients specifically.
<unk> demonstrated mean total IGT reductions of 66, 4% from baseline.
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Results were consistent across the entire population irrespective of acetyl choline receptor antibody status.
Dr. Harald Reinhart: Our partner, Agenix, plans to submit a BLA to the FDA by the end of 2022. And just a few weeks ago, ITINIX announced interim results from the ongoing Phase III ADAPT Plus study, a three-year extension study evaluating long-term safety, tolerability, and efficacy of f-gut-TGMOD for the treatment of adults with GMG. These data suggest that long-term treatment with repeated cycles of FKT-GMOID provides undiminished benefits with each treatment course. The safety profile was consistent with what was observed in the pivotal probe. Moving to CL1102, our topical IL-17 monoclonal antibody fragment
Our partner <unk> plans to submit a BLA to the FDA by the end of 2022.
Just a few weeks ago <unk> announced interim results from the ongoing phase three adapt plus study 83 year extension study evaluating long term safety tolerability and efficacy of <unk> for the treatment of adults with gmg.
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These data suggest that long term treatment with repeated cycles of a scratchy mode.
<unk> undiminished benefits with each treatment course.
The safety profile was consistent with what was observed in the pivotal program.
Moving to Seattle, 11, O two hour topical IL 17 monoclonal antibody fragment.
Dr. Harald Reinhart: Last quarter, we reported that we were very excited to show skin penetration and early clinical benefit in a proof-of-concept trial in patients with chronic plaque psoriasis. As many of you know, the market opportunity for CL1102 is quite significant; psoriasis affects approximately 135 million people worldwide, of which 80 to 90% suffer from chronic plaque psoriasis, and 70 to 80% of these patients have There is a strong rationale and patient need to develop a topical formulation with IL-17 directive therapy that works directly on the lesion and avoids systemic exposure and side effects. Current topical therapies provide limited efficacy or have safety issues with longer-term use.
Last quarter, we reported that we were very excited to show skip penetration and early clinical benefit in a proof of concept trial in patients with chronic plaque psoriasis.
As many of you know the market opportunity for CL 11 O two is quite significant.
Psoriasis affects approximately 125 million people worldwide of which 80% to 90% suffer from chronic plaque psoriasis.
And 70% to 80% of these patients have mild to moderately severe disease.
These are strong rationale and patient need to develop a topical formulation with IL 17, directed therapy that works directly on the lesion and avoids systemic exposure in side of things.
Current topical therapies provide limited efficacy, whereas safety issues with longer term views.
Dr. Harald Reinhart: We are working hard to bring this innovative treatment option to patients in need as quickly as possible. In March 2022, we filed a patent for topical hydrogel, ramped up substance drug product production to support phase two clinical trial activities, and submitted a pre-IND meeting dossier to the FDA. We are on track to start a dose-finding phase 2 trial of CL1102 in the second half of this year. Moving on to the neuroscience area.
We are working hard to bring this innovative treatment option to patients in need as quickly as possible.
In March 2022, we filed a patent for topical hydrogel ramped.
Ramped up drug substance drug product production to support phase two clinical trial activities and submitted a pre IND meeting dossier to the FDA.
We are on track two sided dose finding phase II trial of <unk> 11, or two in the second half of this year.
Moving on to the neuroscience area as you recall last November the entity to an agreement with Corona Therapeutics for rights to car T in greater China.
Dr. Harald Reinhart: As you recall, last November, we entered into an agreement with Corona Therapeutics for rights to CAR-XT in Greater China. CAR-XT is an oral investigational drug combination consisting of xenomeline, a muscarinic agonist that stimulates the M1, M4 receptors in the central nervous system, and traspium, a muscarinic antagonist that reduces the incidence of peripheral GI sites.
Car X T is an oral investigational drug combination consisting of anomaly a muscarinic agonist that stimulates the M. One and four receptors in the central nervous system.
And Trust me you a muscarinic antagonist that reduces the incidence of Perry from Gi side effects.
Dr. Harald Reinhart: In the Phase 2 eMERGENT1 trial, CAR-XT demonstrated clinically meaningful and statistically significant improvements in the positive and negative syndrome score, or PANS, total score, and also in the PANS positive and PANS negative sub-score. CARIX-T was well tolerated, much better than senomaline alone. Our partner Karuna expects to report top-line data from the Pivotal Phase 3 study, also known as the Emerging 2 trial, in the third quarter 2022. In addition, Corona expects to initiate a study in Alzheimer's patients with psychosis in mid-2022.
In the phase II emerge and one trial car X T demonstrated clinically meaningful and statistically significant improvements in the positive and negative syndrome score or pants.
<unk> score and also in the past policies and pants negative sub scores.
Car X T was well tolerated much better thanks anomaly alone.
Our partner Corona expects to report topline data from the pivotal phase III study PK also known as emerged two trial in third quarter 2022.
In addition, <unk> expects to initiate a study in Alzheimer's patients with psychosis in mid 2022.
Dr. Harald Reinhart: As part of a bridging program, the ZIII team is getting ready to submit the clinical trial application for a pharmacokinetic study in China, designing a clinical trial program in collaboration with Chinese key opinion leaders, and preparing for a meeting with the CDE in mid-2022. Now switching over to our two antibiotic programs. We will have major regulatory interactions for both of these this year. First, an update on sulbactam dolobactam, our drug for multidrug-resistant acetylbacter infection.
As part of a bridging program design team is getting ready to submit the clinical trial application for a pharmacokinetic study in China designing a clinical trial program in collaboration with Chinese key opinion leaders and preparing for a meeting with the C. D E.
In mid 2022.
Now switching over to a two way to biotic programs, we will have major regulatory interactions for both of these this year.
First.
Update on <unk>, our drug for multi drug resistant acinetobacter infections.
Dr. Harald Reinhart: Our partner TASIS had a successful pre-NDA meeting with the FDA this spring, and is on course for a US NDA submission in mid-2022. Likewise, Zai will hold meetings with the CDE to discuss CMC filing requirements as there are subtle differences between the U.S. and China, and to respond to CDE queries from the last meeting. Our current plan is for a Chinese submission in the fourth quarter of 2022. We will request breakthrough designation and ask for expedited review given the high unmet medical need for this important new drug in China. Zyra, for motorcycling, was just launched in China with our Chinese partner, Hanway.
Oh pardon me paces and success P. M D. A meeting with the FDA. This spring and this will of course for U S. NDA submission in mid 2022.
Likewise XI will host meetings with a C D E to discuss CMC filing requirements as they.
There are subtle differences between the U S and China.
To respond to CD queries from the last meeting.
Our current plan is for China submission in the fourth quarter 2022.
He'd been the request breakthrough designation and asked for an expedited review given the high unmet medical need for this important new drug in China.
Omadacycline Xyrem was just launched in China, with our China partner Hanway.
Dr. Harald Reinhart: On the commercial front, we hope to see the same strong healthcare provider and patient uptake in China that has been seen in the United States. Zai will meet with CDE later this year to discuss post-approval studies, which we are currently designing with expert input to meet both regulatory expectations and to support marketing efforts. Now, Billy will speak about progress with our commercial products and financial results.
On the commercial front, we hope to see the same strong health care provider and patient uptake in China that has been seen in the United States.
I will lead with C. D. Later this year to discuss post approval studies, which we are currently designing with expert input to meet both regulatory expectations and to support marketing efforts.
And now believe we'll speak about progress with our commercial products and financial results daily.
Billy Cho: Not fast enough to mention, we have taken multiple actions to facilitate access to global capital markets, and we expect Zai Lab to continue to have strong liquidity in the future. In April, we announced the engagement of KPMG LLP, a U.S. auditor, as our Independent Registered Public Accounting. KPMG will be engaged to audit the annual consolidated financial statements of Zai Lab filed with the USSEC and our internal controls over financial reporting for the fiscal year ending December 31st, 2022.
That's enough dimension, we have taken multiple actions to facilitate access to global capital markets and we expect as I love to continue to have strong liquidity in the future.
In April we announced the engagement of KPMG L. P U S lobster.
Dependent registered public accounting firm.
KPMG will be engaged audited annual consolidated financial statements of dialogue Basel USA seat and controls over financial reporting for the fiscal year ending December 31 2022.
Billy Cho: The engagement of KPMG is a natural outcome of our continued evolution into a global pharmaceutical company. Consistent with our globalization strategy, we view our global shareholder base as key to future success and to achieving our vision of improving human health worldwide. KPMG's engagement facilitates continued global liquidity for our shareholders through our NASDAQ and Hong Kong stock exchanges. The transition to a U.S. auditor like KP&G also fits well with our existing and growing presence in the United States.
The engagement of KPMG as a natural upward.
Our continued evolution into a global biopharmaceutical company.
Consistent with our globalization strategy review, our global shareholder base is key for future success and to achieving our vision of improving health worldwide.
KPMG is engagement facilitate continued global liquidity for our shareholders through our NASDAQ at Hong Kong stock exchange listings.
Transition to a U S auditor KPMG also fits well with our existing and growing presence in the United States.
Billy Cho: In addition, we have announced our plan to pursue voluntary conversion to dual primary listing on the main board of the Hong Kong Stock Exchange Reserve. Becoming a dual primary listed company will enable us to be eligible for stock, which is a key channel by which investors in mainland China can invest in stocks traded on the Hong Kong Stock Exchange.
In addition, we have announced our plans to pursue voluntary conversions to dual primary listing on the main board of the stop Hong Kong stock Exchange recently.
A dual primary listed company will enable us to be eligible for stock connect which is a key channel by which investors in mainland China and invest in stocks traded on the Hong Kong stock exchange, we want to provide all investors with robust liquidity for Ats as traded on NASDAQ.
Billy Cho: We want to provide all investors with robust equity for our ADSs traded on NASDAQ, as well as ordinary shares traded on the Hong Kong Stock Exchange. This follows from our share split of our ordinary shares in issue, which became effective on March 30th, 2022. Moving to our commercial performance, our strong commercial execution continues to drive robust revenue growth in our four market products, Zajula, Optum, Kinloch, and Zyra. Dijula continued to perform well, building on the news from year end 2021 when the first final variant cancer indication was included in the NRDL.
As well as ordinary shares traded on the Hong Kong stock exchange.
This follows from our share split of our ordinary shares in issue, which became effective March 32022.
Moving to our commercial performance our strong commercial execution continues to drive robust revenue growth in our four marketed products that youre off to Kim book and as IRA.
Did you look continue to perform well building on the news from year end 2021 for the first line ovarian cancer indication with a prudent Indiana yeah.
Billy Cho: With this favorable reimbursement decision and Zijula's unique label for ovarian cancer patients, regardless of biomarker status, we are seeing a promising trend of gaining market share for Zijula in the first three months of this year, and we continue to expect it to achieve a leadership position among therapies available to treat ovarian cancer no later than. In addition, as of March 31, 2022, Zizhou will be listed in over 1,500 hospitals in China, Similarly, we continue to achieve solid growth and optimal results.
With this favorable reimbursement decision.
This unique label for ovarian cancer patients regardless of biomarker status.
We are seeing a promising trend of gaining market share of keytruda in the first three months of this year and we continue to expect to achieve a leadership position amongst therapies available to treat ovarian cancer no later than next year.
In addition, as of March 31st spoke way too.
<unk> was listed in over 1500 hospitals in China, providing a strong foundation for posts and audio performance.
Similarly, we continue to achieve solid growth in there too.
Billy Cho: In the first quarter, Optum continued to be one of the top three treatments reimbursed. As for Leukinloch, we are committed to establishing it as a standard treatment for 4-fine gist, which is over 7,000 new patients every year in China and growing. As of March 31, 2022, Optum and Kinloch will be covered by 37 and 58 municipal or provincial supplemental insurance plans in China, respectively.
In the first quarter uptake continues to be one of the top three treatments reimbursed.
As for the Kimball, we are committed to establishing understand the trigger for fourth line Gist, which is over 7000, new patients every year in China.
As of March 31st Stoke 'twenty to opt in and Kim covered by 37, and 58 municipal eventual supplemental insurance and China, respectively.
Billy Cho: As we noted last year, New Zyra was successfully launched in China in December. It is a novel and botted with oral and intravenous formulation for the Treatment of Community Acquired Bacterial Pneumonia, or CAP, and Acute Bacterial Skin and Skin Structure Infections, or APSI. Desire was approved as a Category 1 Innovative Drug and is locally manufactured in China. We believe Nuzira is a potential best-in-class tetracycline with demonstrated efficacy comparable to Moxifoxin in CAP and to Linizolid in Abcd.
As we noted last year desire was successfully launched in China in December .
It is a novel antibody with both oral and intravenous formulations.
Treatment of Judy acquired victory pneumonia or cap.
And acute bacterial skin and skin structure infections or <unk>.
<unk> was approved as a category one innovative drugs and is locally manufactured in China, We believe as IRA as a potential best in class recycling.
With demonstrated efficacy comparable to market officer in CAC and so that is all the NFC.
Billy Cho: With significant unmet needs for broad-spectrum antibiotics addressing MDR infections with a favorable safety profile, we expect to seek NRDL inclusion for both indications this year to benefit many more patients. Now, I will discuss first quarter financing. Total revenues for the first quarter of 2022 were $46.7 million, up from $20.1 million for the same period in 2021. As mentioned, we are very pleased with the successful launches and sales trajectory of our market products.
With significant unmet needs for broad spectrum antibiotics dressing MTR infections with a favorable safety profile, we expect to seek M. D O inclusion for both indications this year could benefit many more patients in need.
Now I will discuss first quarter financial results.
Total revenues for the first quarter of 2022 were $46 $7 million.
From 'twenty, one going to lift for the same period installed one.
Billy Cho: With many more product launches to come, our commercial platform, over time, is expected to generate strong continued growth and considerable operating leverage. The jewel of sales for the first quarter at some point you were $29.6 million. Over the same period of 2021, Jula sales were $12.6 million, and opt-in sales for the first quarter were $12.8 million. Over the same period until 21, options sales were $7.1 million. Kinloch sales for the first quarter were $3 million.
As mentioned, we are very pleased with the successful launch trajectory of our market products with many more product launches come our commercial platform over time is expected to generate strong continued growth and considerable operating leverage.
Did you lose sales for first quarter at some point you were $29 $6 million.
Same period adult 21 did you lose sales were $6 million.
<unk> sales for first quarter were $12 $8 million okay.
Over the same period installed 21 after sales were $7 $1 million.
Jim log sales for first quarter was three $3 million.
Billy Cho: Over the same period in 2021, Kinloch sales were $0.4 million. However, desired sales for the first quarter were $0.7 million. Research and development expenses were $53.9 million for the first quarter of 2022, compared to $203.9 million for the same period in 2021. The decrease in R&D expenses was primarily due to no upfront payment for new licensing agreements, partially offset by increased expenses related to ongoing and newly initiated late-stage clinical trials, and higher payroll and payroll-related expenses from increased R&D headcount.
Over the same periods totaled 21, kilo elsewhere zero point $4 million.
Our sales for the first quarter, where there are quite $10 million.
Research and development expenses were $53 $9 million for the first quarter of 2022 compared to $203 $9 million.
For the same period till 'twenty one the decrease in R&D expenses was primarily due to no upfront payment for new licensing agreements, partially offset by increased expenses make ongoing and newly initiated late stage clinical trials and higher payroll and payroll related expenses from increased R&D headcount.
Billy Cho: Excluding up-front payments for new licensing agreements, core R&D expenses were $53.9 million for the first quarter of 2022, compared to $41.6 million for the same period in 2021. Selling general and administrative expenses were $57 million for the first quarter of 2022, compared to $35.8 million for the same period in 2021. The increase was primarily due to payroll and payroll-related expenses from increased commercial and general administrative debt, as Zai Lab continues to expand and invest in its commercial operations in China in anticipation of substantial top-line growth over the next few years.
Excluding upfront payments for new licensing agreements or core R&D expenses were $53 $9 million for the first quarter, it's still quite true compared to $41 $6 million for the same period, it's still in 'twenty one.
Selling general and administrative expenses were $57 million for the first quarter of 2022 compared to $35 8 million votes for the same period. It's still 21. The increase was primarily due to payroll and payroll and payroll related expenses from increased commercial and general and administrative head count.
<unk> continues to expand and invest in its commercial operations in China in anticipation of substantial top line growth.
The next few years.
Billy Cho: Zai Lab reported a net loss of $82.4 million for the first quarter of 2022, or a loss per share attributable to common stockholders of $0.09, compared to a net loss of $232.9 million, or a loss per share attributable to common stockholders of $0.26, for the same period in 2021.
<unk> reported a net loss of $82 $4 million for the first quarter 'twenty two.
The loss per share attributable to common stockholders of mindset.
<unk> net loss of $232 $9 million.
Loss per share attributable to common stockholders of 26 for the same period, it's still 21.
As of March 31st Stones by two cash and cash equivalents short term investments and restricted cash totaled $1.31 billion compared to one point for $1 billion as of December 31st adopt quite well.
Operator: As of March 31st, 2022, cash and cash equivalents, short-term investment, and restricted cash totaled $1.31 billion compared to $1.41 billion as of December 31st, 2021. We would now like to turn the call back over to the operator to open up the line for questions. Operator. Thank you. We would now like to open the line for questions. If you have a question, please press star 1 at this time. If you wish to cancel your request, please press the pound or hash key.
We would now like to turn the call back over to the operator to open up the line for questions operator.
Operator: Once again, this is Style 1 for questions. This question comes from the line of Michael Yee from Jefferies. Please ask your question. Thank you. Good morning.
Thank you we would now like to open the line for questions. If you have a question. Please press star one at this time, if you wish to cancel your request. Please press the pound or hash key.
Once again the star one for questions.
Our first question comes from the line of Michael <unk> from Jefferies. Please ask your question.
Michael Yee: Appreciate the update. We had two questions. One was a big picture question, and one was a pipeline question.
Thank you and good morning.
I appreciate the update we had two questions one was that.
Michael Yee: From a big picture perspective, obviously, investors are watching afar but a bit concerned about the various challenges in China. Maybe you could just talk a little bit about some of the commercial dynamics and whether there's any impact due to lockdowns and access to hospitals, and particularly with respect to enrolling clinical trials. A lot of different companies are saying different things, so if you could give us a snapshot of what's going on there, that would be helpful.
Big Picture question, and one was a pipeline question.
From a big picture perspective, and obviously investors are watching a far but a bit concerned about the various challenges in China, maybe you could just talk a little bit about some of the commercial dynamics and whether theres any impact due to lockdowns and access to hospitals and in particularly with respect to enrolling clinic.
Trials a lot of different companies are saying different things. So if you could give us a snapshot of what's going on there that would be helpful. And that pipeline question is you affirmed in your press release that you are planning to submit <unk> to China F. T E. In the middle of this year did you actually meet with the FDA and confirm that that's okay are you still in <unk>.
Michael Yee: And the pipeline question is, you said in your press release that you are planning to submit efgartijima to the Chinese FDA in the middle of this year. Did you actually meet with the FDA and confirm that that's okay? Are you still in discussions? If you could shed some light on that, that would be great.
<unk>, if you could shed some light there that would be great. Thank you.
Unknown Speaker: Hey, Mike, thanks for your questions. I'll take the first one and give the second one to either Samantha or Harald.
Hey, Mike Thanks for your questions I'll take the first one the second one to either Smith.
Eric.
Unknown Speaker: So in terms of the COVID situation, you know, we've been operating under a COVID environment for well over two years now. Unsponsored ADR Now, as you may have heard from prepared remarks, there are some challenges in the second quarter, particularly in Shanghai. So, we're continuing to monitor very closely, but I would like to report that as of the most recent statistics, the number of new cases is less than 5%, and it may be even less than 4% of the peak. And Yesterday, there were zero cases found in the community.
So in terms of the Covid situation, we've been operating under a COVID-19 environment for well over two years now.
And have developed protocols and procedures.
Which have now been in place to minimize impact throughout this time.
Now as you are.
Maybe her for prepared remarks.
There are some challenges in the second quarter.
Particularly in Shanghai.
No.
We're continuing to watch it very closely but I would like to report that as of most recent statistics.
Number of new cases are less than 5% and maybe even less than 4% of the peak.
And yesterday, there were zero cases filed in the community.
Unknown Speaker: So, most importantly, overall, at this particular point in time, we do not feel a need to make any changes to our previously communicated execution goals for this year, including all of our clinical development and regulatory milestones. And in terms of the global programs and strategies that we have, there's no impact there. And all of our programs are on track, including initiating a global phase two trial for the L-17 program called GL-1102 in the second half of this year. Great to hear about that. And Efgar Tidgemann?
So most importantly overall at this particular point in time, we've not seen the need.
To make any changes to our previously communicated execution goals for this year.
Putting all of our clinical development and regulatory milestones.
And in terms of the global program strategy that we have a theres no way back there.
And all of our programs are on track.
Including initiating a global phase II trial of but he all 17 program called C O a little too in the second half.
For this year.
Okay.
Unknown Speaker: Yes. Yeah, hi. Thank you so much for the question on Efgar and this regulatory pathway forward.
Great to hear on that in an effort to German yes.
Yes, hi.
Hi, Thank you so much for the question on <unk> regulatory pathway forward, Yes, we have indeed plans to meet with the FDA about C. D E. The middle of this year and we have already submitted a dossier to them and follow up to a communications, which we had with them last year.
Unknown Speaker: Yes, we indeed have plans to meet with, not FDA, but CDE, in the middle of this year. And we have already submitted a dossier to them, a follow-up to a communication which we had with them last year. You may recall we mentioned in our press releases that we had a very good meeting with them about what they would expect in our dossier. In the meantime, since that meeting last year, a lot of things have happened, including the results of our PK studies in China coming through, and more importantly, even the Japan approval for Efgar Tidgemann, which is a broad label for this drug. So we are already awaiting a response from the CDE on our proposed plans going forward.
You may recall I mean, we mentioned in our press releases that we had a very good meeting with them about what would be the ingredients. They expect.
In the meantime, since that meeting last year lot of things have happened, including the results of our PK studies in China came through.
And more importantly, even the Japan approval for <unk>, which is a broad label for this drug. So we are now ready and waiting a response from the C. D E on our proposed.
Plans going forward so.
Unknown Speaker: So when that meeting will be exactly, we don't know, but it will hopefully happen in the middle of this year. And that will dictate what we will do subsequently.
When that meeting will be exactly we don't know, but it will hopefully happens the middle of this year and that will dictate what we will do subsequently.
Hmm.
Got it thank you very much.
Okay.
Unknown Speaker: Thank you. Thank you. Our next question comes from Yigal from CT Group. Please ask your question. Hey Samantha and Billy and the team, thank you for taking the questions. I have one for you, Billy. Just regarding the news last month that you announced KPMG will be engaged as ZII's independent registered accounting firm, just wondering if there are any other operational or technical steps that you need to gain compliance with HFCAA at this point? Or is the inspection by the PCAOB the only step?
Thank you.
Our next question comes from ego from Citigroup. Please ask your question.
Hey, Samantha and billing and team. Thank you for taking the questions I.
I had one for you Billy just regarding the news last month, the U K E. M. D will be engaged adviser independent registered accounting firm. Just wondering are there any other operational or technical steps you need to gain to gain compliance with H C. A a at this point or is the inspection by the P. A L.
Yigal Nochomovitz: And if inspection is the only step left, could you just clarify what ZII and KPMG need to demonstrate in this inspection to satisfy the regulators? Thank you. Yeah, hey, Yigal.
The one step and if in fact is the almost step left.
Could you just clarify what sign KPMG need to demonstrate almost inspection to satisfy the regulators. Thank you.
Billy Cho: Thanks for your question. You're right. On April 21st, we did an express release and problem 8k, where the audit committee or the board appointed KPMG US as our auditor for the purposes of filing the financial statements with the SEC and Hong Kong for that matter.
Yeah, Hey, Bill.
Thanks for your question Youre right on April 21 press release 8-K.
Where our audit committee, our board appointed KPMG U S. Either order that for the purposes of filing our financial statements with the SEC in Hong Kong for that matter.
Billy Cho: And as many of you know, a counter from the U.S. by keeping the U.S. is subject to inspection by the PCOD. And therefore, consistent with what we've been stating and also filing in our, you know, queues last year, in our most recent case, we don't expect any interruption to our NASDAQ listing, and we expect, with very high confidence, that we will comply with HFCAA, and we do fully expect to be off the list in the next 10K cycle.
And as many of you know.
Coming from the U S. Like you can be USA subject to inspection by the P. C O D.
And therefore, consistent with what we've been stating.
Stating and also filing in our shoes last year in our most recent K.
We don't expect any reduction to our NASDAQ listing and we expect.
And you know with very high confidence that we will comply.
With HFC AA and we do fully expect to be off the list in the next 10-K cycle.
Billy Cho: Okay, gotcha. And then maybe a question for Samantha or Alan, shifting to the pipeline, regarding the in-house topical IL-17. I think you indicated that Zai is meeting with FDA soon to design a comprehensive phase 2 program, which as you noted in the call, is expected to be a global multi-center study in chronic plaque psoriasis. So the first question is, operationally, have you had that engagement yet with FDA? And if so, what were the takeaways?
Okay Gotcha.
And then maybe a question for Samantha Allen systems of the pipe of pipeline regarding the in house topical IL 17, I think you indicated that XI is meeting with FDA soon to design a comprehensive phase III program, which is as you noted in the call is expected to be a global multicenter study in chronic plaque psoriasis.
So first question is operationally have you had that engagement yet with FDA and if so what were the takeaways and then secondly, looking further down the road since one one O. Two obviously a wholly owned program I'm. Just curious what are your thoughts on whether you would launch this product beyond China. Obviously this is a highly appealing product.
Unknown Speaker: And then secondly, looking further down the road, since 1102 is obviously a wholly-owned program, I'm just curious, what are your thoughts on whether you would launch this product beyond China? Obviously, this is a highly appealing product for the U.S., European, and Japanese markets. And additionally, given the recent addition of Josh Smiley to the team, his experience at Lilly in scaling pharma businesses could prove very useful in building an international franchise for 1102. So if you could offer your thoughts there, that'd be great. Thank you. Yeah, this is, I guess, a question for me.
For the U S European and Japanese markets and and Additionally, given the recent addition, with Josh Smiley to the team.
His experience at Lilly and scaling pharma businesses.
Think could prove very useful in building our international franchise for one one of them too. So if you could offer your thoughts there that'd be great. Thank you.
Yeah. This is I guess a question for me.
Unknown Speaker: Aisle 17 at 1102 is indeed now going and getting ready for a phase two study in the U.S. This is something which we still need to discuss with FDA. So to your question, we haven't had this meeting yet, but we have submitted the data. So we will hear from them back and adjust accordingly, but we still believe that we can start this study, phase two study, multi-center, as you said, placebo-controlled and all the rest, by the end of this year.
17 at 11 O. Two is indeed, now going and getting ready for a phase two study in the U S.
This is something which we need to still discuss with FDA. So to your question. We did not have this meeting yet, but we have submitted the dossier. So we will hear from them back and adjust accordingly, but we still believe that we can start. This study phase II study multi center as you said.
Placebo controlled and all the risks.
And by the end of this year as.
Unknown Speaker: As far as your question goes about... Global Reach. Maybe I can hand over to others, but I do believe this has indeed been attractive in many, many regions, and we will discuss this in-house. Unsponsored ADR. Now, over to you, Billy. Unsponsored ADR, And just as you said, as we announced in the release, Josh will be the CEO of Satellite beginning August 1st, and you are correct, Zai has good experience of setting up businesses on a global basis. You have no doubt he will be a key contributing member of our globalization effort.
As far as your question goes about.
The global reach.
Maybe I can hand over to others, but I do believe this has indeed.
Attractiveness.
In many many regions and we will discuss this in house and with our.
Our marketing people is great great detail how to stagger approach.
But do you believe.
So it's a matter of please.
Yeah Yeah.
Paul.
And.
Right now.
That's a real good feel like okay.
And you are correct.
Maybe not.
Global thing.
No doubt.
Uh huh.
Well that's it for me.
Billy Cho: In terms of where this project is going, off the face of the beach, because, you know, we're very open. We have the capability to do it in-house, but we also can, and we're open to potential parts that may... Got it. Thank you. Thank you very much. Thank you all. Thank you. Our next question comes from Anupam Rama from J.P. Morgan. Please, that's your question. Hey, guys
In terms of where that's going.
Hmm.
Okay.
Okay.
We have that capability.
In the house, but they also come.
We are open to and so hot.
That's it.
Got it. Thank you. Thank you very much.
Thank you all.
Yeah.
Yes.
Thank you. Our next question comes from Andrew Baum Grandma from J P. Morgan. Please ask your questions.
Anupam Rama: Thanks so much for taking the question. Maybe following up on one of the prior questions, can you give us a sense of the strategies that you have in place for your sales team to continue to engage with physicians in the region, given, you know, the COVID-19 restrictions we kind of talked about on this call in certain regions? Thanks so much. Hey Anupam, yeah, and I'm happy to, you know, give some examples, you know, when we stated earlier how, you know, working under this environment, and we've developed some protocols and procedures.
Hey, guys. Thanks, so much for taking the question maybe following up on one of the prior question can you give us a sense of the strategies that you have in place for your sales team to continue to engage with physicians in the region given the.
The COVID-19 restrictions, we've kind of talked about on this call and certain regions. Thanks, so much.
Hey, you got a problem yeah, no happy to.
Some examples when we stated earlier.
Working on the environment in which helps the protocols and procedures. So often examples theres a range, but two that can spit out to you one would be.
Anupam Rama: So, some examples. There's a range, but two that I can spit out to you. One would be, you know, figuring out a way where, you know, with a digital solution, you can engage with the medical community in a compliant way. So, you know, we had to actually build that, and so that's an example.
Figure out a way where.
With a digital solution you can promote engage with the medical community in a compliant way.
Unknown Speaker: Another example would be where a patient with a prescription, let's say, due to, and there have been flare-ups, right, historically in China over the past two-plus years, and, you know, figuring out ways and having tactical strategies in place to help to get that prescription, potentially at another facility, and having protocols and systems in place for that. So, hopefully that gives you a little bit of a flavor of what we're talking
So.
It's actually build that and so that's an example, another example would be where a patient with prescription, let's say due to and theres been flare ups right historically in China over the past two plus years.
And you can figure out ways and having tactical strategies in place to help to get.
Still that prescription attached at another facility and having protocols and systems in place for that so hopefully that gives you a little bit.
A flavor of what we're talking about here.
Unknown Speaker: Thanks so much for taking our questions. Thank you. Our next question comes from Jonathan Chang from SBB Securities. Please ask your question. Hi guys, thanks for taking my question. First question: with the recent volatility in the markets, can you discuss how your strategy around business development, especially with smaller and earlier stage companies, has changed, if at all? Jonathan, do you want to take this one? Yeah, sure. Hi Jonathan.
Thanks, so much for taking my question.
Yeah.
Thank you. Our next question comes from Jonathan Chang from SBB Securities. Please ask your question.
Hi, guys. Thanks for taking my questions first question with the recent volatility in the market can't discuss how your strategy around business development, especially with smaller and earlier stage companies has changed if at all.
John do you want to cause one yeah sure hi, Jonathan Thanks for the question. So you know.
Unknown Speaker: So, you know, we are, as always, focused on continually building a pipeline. Unsponsored ADR, If you look at more than half of the U.S. biotech companies, Unsponsored ADR, At the same time, you know, we continue to have very strong interest from Western companies as they think about China, how to leverage China to access the second largest pharmaceutical market but also accelerate their global timeline. So, you know, we have a continued good source of those types of opportunities as well.
Jonathan Chang: Thanks for the question. Yeah, sure. Hi Jonathan.
We are as always focused on continuing to building our pipeline.
Unknown Speaker: Unsponsored ADR, I'll also acknowledge that today our share price is severely dislocated, so any opportunity will have an even higher bar to meet in today's market, in the current environment, and we certainly think about BD in the light of that. Got it. Thanks for taking that question. And I guess the second question for me: can you provide some color on the Zula sales trend since the first line and our cable inclusion? Unsponsored ADR, Hey Jonathan.
Our world class assets with a balance of both internal as well as external efforts.
In the current environment.
So do you see a lot of interesting and promising opportunities, which is very good from BD perspective.
If you sort of look at more than half of the U S. Biotech companies today are trading under cash.
So we do see potential opportunities to pick up great assets.
At good prices.
At the same time, we continue to also have very strong interest from western companies.
So as I think about China, how to leverage China to access the second largest pharmaceutical market, but also to accelerate their global timeline. So you know we have.
<unk> good source of those type of opportunities as well.
As always I think will be very selective when it comes to any BD opportunity, we ought to have a very high bar and green assets I'll also acknowledge that our share price is severely dislocated.
So any opportunity.
And even higher.
To meet.
Today's market.
Car environment.
So do you think about BD in light of this context.
Got it thanks for thanks for taking that question and then I guess second question for me.
Can you provide some color on the zoo lot sales trends since our first line and arcade conclusion.
Yeah.
Yes.
Unknown Speaker: Yeah. So, you know, we're not giving script data, or market share data publicly, although we have them internally. And some of the data is available throughout QB, etc.
Hey, Jonathan Yes.
So we're not giving script that our market share data publicly although we have done internally and some of the data are available at <unk> et cetera.
Unknown Speaker: But what you will see is a very clear market share gain that actually starts from even, you know, let's say, third quarter, last year, fourth quarter, you know, and into this year. You saw that the Jula, you know, it was, of course, year over year up substantially, and even fourth quarter, first quarter, you know, in the first quarter, where you have the energy implementation and a seasonally low quarter, excuse me, low You saw that we were able to offset, you know, the 23% price discount with nice revenue.
What you'll see is a very clear market share gain that actually starts from even.
Third quarter last year fourth quarter and into this year you saw that that you are.
Was of course year over year up substantially in the fourth quarter to first quarter.
You know in the first quarter, where you have the interdealer implementation in a seasonally low quarter or excuse me low quarter in China due to the holidays et cetera, you saw that we were able to offset.
You know the 23% price discount with nice revenue and that's on.
Unknown Speaker: And that's on. That's in a situation where, you know, it's not like you flip on a switch on January 1st and all of a sudden, nationwide, you have listings and prescriptions. You actually have to go out and, now, in a very robust fashion, get on the hospital list, then try prescriptions and re-prescriptions. So it's a credit to our commercial team that we had a good first quarter performance, and we're quite pleased with that. And a lot of that, of course, is coming from the first line.
That's been a situation, where it's not like you flip a switch on January 1st and all of a sudden nationwide listings and prescription you actually have to go out and now in a very robust fashion get on the hospital then try prescription can be prescription so.
It's a credit to our commercial team.
That you know.
The first quarter performance and we're quite pleased with that.
And in a lot of that of course is coming from first line.
Uh huh.
Unknown Speaker: You know, at the end of the deal, right, for the ju- Unsponsored ADR. Got it. Thanks for taking my questions. Thank you. Our next question comes from Ziyi Chen from Goldman Sachs. Please ask your question.
On the <unk> deal right residual okay.
And you should expect to see.
A trend a similar trend.
Second third fourth quarter and beyond.
And you should also expect to see market share gains along the way as well.
Got it thanks for taking my questions.
Thank you. Our next question comes from E. Chen from Goldman Sachs. Please ask your question.
Ziyi Chen: Thank you for taking my questions. I have just one simple question on cash burn. So first quarter cash burn has been significantly below, you know, previous quarters. And so, as a pretty deal-like quarter, there were no licensing fees in the first quarter. What will that guide us to think about the overall budgeting for the rest of the year and, particularly, the tough funding environment? What are the possible ways and strategies to extend the cash runway? And if, you know, you have to manage your budget, how will that affect your PD commitment?
Thank you for taking my questions I, just one simple question on the cash burn so first quarter cash burn has been significantly below.
Good quarter.
As a pretty light quarter.
There was no licensing fees in the first quarter, what will guide us to think about the overall budgeting for the rest of the year and particularly facing the tougher funding environment or the possible ways strategies to extend the cash runway.
And if you have Medicare budget, how will that affect the PD commitment. Thank you.
Billy Cho: Thank you. Yeah, I see it. I'm happy to take this one. So I guess, you know, first of all, we have a very, and we've been saying this all along, but we actually have a very good, Product and Edition. Unsponsored ADR, You know, I think that historically and more recently we've been giving guidance around okay, BD cost versus core R&D, but it's not really BD versus R&D; it's really integrated. And by being able to build a portfolio with a much higher probability of success and a development and regulatory strategy, regulatory strategy that plugs into a global trial, it really is by design in terms of efficiency
Yeah, I'd be happy to take this one so I guess first of all.
We have a very we've been saying this all along but we actually have a very.
For Dunkin' efficient.
The platform by design and by strategy.
I think that historically and more recently, we've been giving guidance if I look at BD costs versus core R&D.
But it's not really BD versus R&D, it's really integrated.
By being able to you know.
Build a portfolio with much higher probability of success.
And eight development and regulation strategy, a very clear strategy that plugs into a global trial. It really is by design in terms of efficiencies so you're seeing some of that.
But yes, I mean, so overall the in terms of your cash.
Billy Cho: So you're seeing some of that. But yeah, I mean, overall, in terms of cash, Unsponsored ADR Unsponsored ADR Unsponsored ADR Unsponsored ADR, and there could even be a future where BDE activity results in capital inflows. So today, you know, we have 1.3 billion in cash. Our cash flow for the first quarter was 97 million. Less on a net loss basis, on a P&L basis, but cash barrel was $97 million, and that's down from $160 million in Q4 of last year and also down from $171 million year-over-year.
Third runway type of commentary, even with BD deals.
We're gonna had runway.
At the end of 2024.
And there you think could be a future.
Where BD activity, resulting in truckload.
So today, we have $1 3 billion in cash or cash burn for the first quarter was $97 million.
Okay. So on a P&L basis, with Casper was $97 million and that's down from $1 60.
In Q4 of last year, and also down from 171 million.
Year over year.
Billy Cho: So, you know, I think, you know, it's difficult to give guidance on upfront payment for the year, but it won't be at 2021 levels. And, you know, as we've spoken before, Ziyi, with you, you should look at the historical three-year range, and over 19, 20, and 21, you know, those numbers were $59 million, $108 million, and $384 million, respectively. And I already told you that it's not going to be $384 million. I got it. Thank you, Billy. Thank you. Our next question comes from Yang Huang from Credit Suisse. Please add your question. Thanks for giving me the opportunity to ask. I have two quick ones.
So.
Thanks.
So it's difficult to give guidance.
Prepayment.
For the year, but it won't be a 2021 levels.
So you know as we've.
Spoke before view with you.
You should look at the historical three year range.
Over 29000.
19, 2020 one.
Those numbers were at $59 million, what a wait three to four respectively and are already told you that it's not going to be 384. So.
Got it thank you Billy.
Yeah.
Thank you. Our next question comes from young Kwon from Credit Suisse. Please ask your question.
Yeah.
Yang Huang: First, this is a kind of quick follow-up on COVID. So given the lockdown in some of China's Chinese cities in the first quarter and the second quarter, I wonder, do we see any drug stocking and dynamic change in the first quarter and also the second quarter this year compared to last year? That's my first question. Hey, y'all. Yeah, in terms of inventory to channel stocking strategies, you know, there's no material change. There could be some in the, you know, kind of nuanced incremental activity given what's going on, but nothing material.
Ah Thanks for giving me an opportunity to ask Oh I have two quick ones first there is a kind of a quick follow up on Covid, So Kevin locked all some off China.
Chinese cities and first call or in the second quarter I Wonder do we see early on.
Chuck is talking.
And dynamics change thing with our first quarter and also the second quarter this year compared to last year.
That's my first question.
Yeah.
Hey, yeah in terms of inventory.
Inventory channel stocking strategies.
There is no material change.
There could be some kind of nuanced incremental activity, given what's going on but nothing material. So our strategy there.
It's quite comparable quite consistent.
Unknown Speaker: So our strategy there is quite comparable, quite consistent. Okay, I see. And my second question is on our SG&A expense. So compared to the same period last year, we still see a significant increase in SG&A, which is due to our headcount increase. So I'm wondering, during this kind of difficult period, what is our overall plan for headcount increase for the whole year? And what's the rationale behind it?
Okay I see.
And.
My second question is on our SG&A expense, so compared to the same period of last year, while we still see.
Significant increase on SG&A.
Which is D O to O I head up content increase so I'm wondering if there's a kind of a roll of difficult periods. What is our overall plan for how to call them to increase for the whole year and what's the rationale behind.
Unknown Speaker: Yeah, so SG&A, you're right, Yang, in terms of year-over-year, so first quarter compared to first quarter last year to first quarter this year, our SG&A was up 59%. But it was actually down in Q4 to Q1. So what that means is that in Q1 of last year, we were still in build mode, you know, namely, Unsponsored ADR Unsponsored ADR. Okay, got it
Yes, so SG&A youre right, our young in terms of year over year. So first quarter compare first quarter last year to first quarter. This year, our SG&A was up 59%.
Does that get down Q4 to Q1.
So what that means is that at Q1 of last year, we're still in build mode.
Namely in our commercial team as well, but this year, we don't expect that we don't need to expand on our commercial presence and we already have 50 employees.
We're gonna be able to ramp up revenue, while not adding.
Got it.
I mean, a material number right it could be just incremental at most.
So that's operating leverage kicking in.
And so our SG&A will be up overall year over year, but it will not be close to the level for the first quarter of last year to first quarter of this year.
The reasons I stated.
Yes.
Unknown Speaker: Thanks a lot. Great, Thank you. We have reached the end of the question and answer session. I will turn the call back to Zai Lab's CEO, Samantha Du, for closing remarks. Thank you all for listening. I want to thank everyone for taking the time to join us on the call today. We appreciate your support and look forward to updating you again after the second quarter. Operators, you may now disconnect this call. Thank you. That does conclude our conference for today. Thank you for participating. You may now disconnect.
Okay got it thanks a lot.
Great. Thank you.
We have reached the end of the question and answer session I will turn the call back to <unk>.
It was amended to Falco thing remarks.
Thank you operator.
Hello.
One <unk>.
Taking the time.
Okay.
Yeah Paul.
Okay.
For the second quarter.
Operator, you may now disconnect this call.
Thank you that does conclude our conference for today. Thank you for participating you may all disconnect.
Great.
Yes.
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Samantha Du: Thank you for watching. Thank you for watching. Thank you for watching.
Yeah.
Sure.
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Yeah.
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Yes.
Yes.
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Yeah.
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Sure.