Q3 2022 Zai Lab Ltd Earnings Call
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The conference will begin shortly to raise your hand during Q&A you can dial star one one.
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Yeah.
Hello, Ladies and gentlemen, thank you for standing by and welcome to the Xylem third quarter 2022 financial results Conference call.
This time all participants are in a listen only mode. Later, we will conduct a question and answer session and instructions will follow at that time.
Reminder, today's call is being recorded it just now my pleasure to turn the floor over to Billy Cho Chief Financial Officer of <unk>.
It will make introductory comments.
Thank you operator.
Good evening and welcome everyone.
We issued a press release provides the details of the company's financial results for the third quarter of 2022 as.
As well as some recent product highlights and corporate update.
This release is available in the Investor Relations section of the company's website at IR <unk> com.
Today's call will be led by Baucus must have you got it.
Founder chairperson and Chief Executive Officer.
Joining by Josh Smiley, Chief operating officer, who will discuss that with their oncology product candidates.
Harold Reinhart, President and head of corporate development, neuroscience, autoimmune and infectious diseases or <unk>.
Speak about the progress we've made in those three therapeutic areas.
I will discuss the performance of our marketed products include with comments on our financial results.
We saw exactly as well have you 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 like 95.
Our business plans and objectives and timing and success of our clinical trials, our sales and revenue forecast for our products and product candidates 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 actual results could differ materially from what we expect it to a variety of factors, including those discussed.
Billings.
At this time.
Pleasure to turn the call over to <unk>, founder Chairperson and Chief Executive Officer, Dr. Samantha Du.
Thank you Billy Hello, everyone and.
Thank you all for joining us today.
The third quarter marked another period of strong execution across our company.
<unk> revenue growth, continuing and significant progress in our meat and late stage pipeline.
On business development.
Over the next few quarters and years ahead I have little adults that will continue.
Something the company through growth and productivity.
Before I get into specific details.
I'd like to say that very proud of all of our employees.
Across the globe, especially with carton size ability deliver time and time again, no matter what challenges present themselves.
We have built a great culture.
Focus on innovation to bring transformative medicines to address unmet medical needs.
Fundamentally we have a very productive year so far.
Are you anticipating finishing couldn't be 'twenty, two having delivered no all of our key corporate park.
We continue to demonstrate resilience revenue growth in the third quarter.
We expect some ongoing challenges from Covid.
Certain regions in China.
That could deliver significant revenue growth for years to come.
Our broad need in late stage development.
They continue to see strong advanced at.
Highlights by our agreements with the and then P. A development plan for the car T for a bridging study with schizophrenia in China.
On the business you bought them from.
We recently announced the strategic collaboration with season pass T back.
Which since the.
<unk>.
Unmet medical needs in women's cancer in China.
In addition, we expect to realize significant synergies.
Our existing commercial infrastructure.
Cubic position in this important did you theory.
In summary, we remain confident in the fundamental strength of our business no ability to create significant shareholder value.
With that I would like to turn the call over to Josh Josh.
It's been an exciting first quarter as chief operating officer and Zack.
We currently face some challenging global economic headwinds.
Gentlemen, it has been amazing to see the focus and determination of everyone at <unk> to continue to deliver on our mission of bringing transformative medicines to patients in China and around the world.
The fundamental drivers of value of di lab are strengthened by our experienced leadership team global talent and first or best in class pipeline.
We announced last month that Alan Sandler had last night, and we expect to name a new head of global oncology development soon.
I am very excited to support Samantha on the operational side as she personally leads our global oncology function in the interim I'm also very excited to welcome Dr. Peter Peter Warne design lab.
Lead and oversee our discovery efforts in translational medicine.
Peter joined the company from <unk> Pharmaceuticals. This week and has a strong track record in leading internal discovery research as well as external collaborations.
We look forward to driving innovation in drug research and development under his leadership I.
I also had the opportunity to welcome elect Burbank to die last month as senior Vice President head of global strategic partnering I'll, let joined the company from Novartis and she is our first employee based in Europe .
He is responsible among other things for leading our European business development efforts.
And our commercial progress, which may have been touched on I'm excited to highlight key business development updates from the third quarter, especially our new regional and highly synergistic collaboration with CJ and forgive them.
As many of you know <unk> is the first and only ADC approved in the U S for the treatment of adult patients with recurrent or metastatic cervical cancer.
This collaboration further strengthens our oncology leadership in China, particularly in women's cancer, where we have established a strong sales team and portfolio, including the jeweler and others.
We will leverage such leadership as our team works to commercialize and accelerate patient access to tip back in China, We will join the ongoing global television 301 phase III confirmatory study and certain potential global studies in other indications.
Of course, we continue to evaluate other business development opportunities as well, including potentially transformative opportunities and partnerships for our global pipeline.
We've been very disciplined historically and plan to be even more selective in the future in terms of quality deals that are synergistic with our existing portfolio.
In terms of commercial progress we continue to see strong rapid revenue growth led by mid July as you may be aware in October the FDA expressed some concerns to our partner GSK regarding the overall survival data from Gsk's, Nova study in the U S and the approved indications for <unk> in the U S. In the recurrent ovarian cancer.
Cancer study.
GSK is currently considering the fda's feedback inappropriate next steps, but I'd like to highlight today that we do not expect this development to impact our full approval in July and the second line all comers setting in China.
Notably unlike Gsk's U S approval, which was based entirely on Gsk's Nova study.
And NPA is full approval of the jewel in the recurrent ovarian cancer setting is based on a separate study the Nora study, which is a phase III randomized double blind placebo controlled study of the jewel of the company independently conducted in China.
While the North study is not fully mature to date, we are seeing favorable trends in overall survival.
We also do not any do not anticipate any impact to our first line ovarian cancers that Julia indication in China. The FDA discussion with GSK does not apply to get indication. This first line indication is the largest ovarian cancer market opportunity for XI accounting for over 60% of the jewelers revenue in 2022 in China, and we expect this <unk>.
And as to increase through the remainder of this year and beyond.
Moving to clinical development for our other oncology assets. Most recently at <unk>, we showcased two assets with our internally developed pipeline with global rights, including presentations on two key early stage global programs.
101, one and anti quad and $18 two antibody NGL <unk> and anti <unk> antibody for <unk>, we presented data showing enhanced anti tumor activity combined with standard of care chemotherapy in in vivo animal models.
<unk> beyond what was presented in the ACR earlier this year. The data supports <unk> depleting T. Reg cells from human tumor samples in vitro and in vivo animal models and our single cell RNA sequence data indicates that <unk> targets.
The highly suppressive T Reg populations.
In November 2022, our partner Blueprint medicines presented an update on the phase <unk> trial the.
The data supports the plan to develop Blue 95 in combination with also mcnab in first line Egfr L 858, <unk> mutation positive.
Non small cell lung cancer.
Egfr mutation is one of the most common mutations in non small cell lung cancer, especially in China. We worked closely with blueprint medicines to accelerate the global development and potentially change the treatment landscape for Egfr mutated non small cell lung cancer patients in China.
Further in September 2022, our partner Marathi presented results from Crystal one.
<unk> cohort phase <unk> study evaluating <unk> with or without <unk> in patients with advanced colorectal cancer harboring K Ras <unk> mutation at ESMO.
We believe the data continue to demonstrate that added rapid is potentially a best in class <unk> inhibitor in CRC looks.
Looking ahead, <unk> expects potential U S FDA approval and commercial launch in the United States for <unk> as the treatment for patients with non small cell lung cancer harboring. The <unk> mutation, who have received at least one prior systemic therapy with the Paducah target action date of December 14, 2002.
You too.
We remain confident that <unk> in China can be both first in class and best in class, we will try to accelerate the regulatory pathway for second line plus non small cell lung cancer monotherapy by leveraging the global data package for the FDA approval. The ongoing PK study in China, and the global Confirmatory K 12 study.
Which die lab joined in the second quarter of 2022.
We also recently launched our Trust report. This report provides updates on our environmental social and governance or ESG commitment and activity since the release of our ESG report last year and described our latest ESG strategy, which we are calling trusts for life.
Dice Trust for life strategy includes three commitments to.
To improve human health create better outcomes and act right now as.
As part of our commitment to improve human health, we seek to reach 1 million patients with XI medicine by 2030.
And now I will turn to Dr. Harold Reinhart to discuss progress on our autoimmune and neuroscience therapeutic areas Harold.
Thank you Josh.
I am excited for the opportunity to share with you today, the progress across our autoimmune neuroscience and anti infective therapeutic areas.
Let's start with with regard to demand on.
On the regulatory front, we are happy to share that our partner at JV continues to make excellent progress with.
With the FDA <unk> recently announced the submission of our BLA for <unk> SC subcutaneous <unk> for the treatment of generalized myasthenia gravis or gmg in adult patients.
As a reminder, we had sized submitted a BLA for heska, but TD Mark IV intravenous <unk> for the treatment of patients with Gmg in China in the second quarter and expect to improve next year.
On the EMEA front <unk> also announced that the European Commission has granted marketing authorization for this guide as an add on to standard therapy for the treatment of adult patients with CMT, where passenger quality receptor auto antibody positive.
It continues to support our techniques on indication expansion in China, and we were advised and we soon expect to launch the proof of concept trials in two autoimmune renal diseases.
Moving to car XP, the combination of anomaly antitrust P M, which we are developing with our partner to Corona and acute schizophrenia.
<unk> has obtained agreement with an NPA on the development plan for a bridging study in China.
As you recall, we saw results from Corona has emerged to try to release this August .
This pivotal trial mid primary endpoints with <unk>.
T demonstrating a statistically significant nine six reduction in total score compared to placebo at week five.
In addition.
Corona initiated the phase III <unk> study evaluating <unk> as a treatment for psychosis and Alzheimers disease and has completed enrollment in the phase III emerging III trial in schizophrenia.
It speaks topline data from the phase III <unk> III trial in schizophrenia in the first quarter of 2023.
And lastly, our internally developed topical IL 17 product CL 11, two continues to progress towards initiation of our global Phase III study in chronic plaque psoriasis in the fourth quarter of 2022 subject to further feedback from regulators.
We presented the results of the phase one proof of concept study for <unk> two.
The 2022 European Academy of Dermatology in Venezuela sheets Congress.
Regarding our <unk> portfolio, we have.
Several noteworthy developments.
For <unk> 24, or two or so to do it we are on track to submit an NDA for the treatment of etsy backed by money I infections to the MPA by the end of this year.
And so omadacycline Ms. Saira, we plan to initiate post approval commitment studies next year, you would have started the dialogue with Cte about operational details.
Now believe we'll speak about progress with our commercial products and financial results.
Thank you Harold.
Dielectric <unk> to execute well with strong results delivered in the third quarter.
But the three months ended September 32022, our total revenues were $57 5 million.
Compared to $43 $1 million for the same period of 2021, representing year over year growth of 33% debt.
Net product revenues for the period were $39 2 million for the July compared to $28 2 million for the same period of the top 41, representing 39% growth.
$10 7 million often with respect to resume its growth trajectory this quarter.
$5 $5 million per kilowatt compared to $4 3 million for the same period in 2001 at.
At $1 5 million for this arm compared to nil for the same period last year.
We believe killed off and <unk> are on track to enter negotiation with the NMDA regarding potential inclusion in the <unk> by the end of the year.
R&D expenses were $99 $5 million for the three months ended September 32, compared to $55 $1 million for the same period in 2021.
<unk> and R&D expenses were primarily due to the $30 million upfront payment.
For the <unk> deal in the third quarter 2022, along with increased expenses related to ongoing and newly initiated clinical trials and higher payroll and payroll related expenses from increased R&D headcount and share based compensation.
SG&A expenses were $66 $60 for three months ended September 32022.
<unk> to $59 million at the same period one.
The increase was primarily due to payroll and payroll related expenses.
Commercial and general and administrative headcount and share based compensation as dielectric team fantastic cost structure and commercial operations.
The pace of any new drug approvals and launches and.
And deliver strong top line growth, we expect our net product revenue to exceed cost of goods sold and commercial expenses in 2023.
Net loss was $161 $2 million for the three months ended September 32022, compared to $96 $4 million with the same period last year.
Increase in net loss was primarily due to $30 million upfront payment.
A new collaboration and license agreement CJ add an increase in foreign exchange loss of $36 7 million.
Which is a noncash adjustment.
Net loss per ordinary share during the three months ended September 32017.
Compared to the same period installed 21.
Net loss per AB 30.
During the three months ended September 32002 was $1 68.
Compared to $1 one for the <unk>.
Same periods about 'twenty one.
As of September 30th two cash and cash equivalents short term investments and restricted cash totaled $1 2 billion.
Which we expect will provide us with cash runway through 2025.
We would now like to turn the call back over to the operator to open the line for questions.
We would now like to open the line for questions. If you have a question. Please press star one and one at this time.
Your first question comes from the line of Michael Yang from <unk>.
Sure.
Hi, good morning, Thank you for.
The updates we had two questions maybe Samantha Billy you could talk a little bit about the fluid dynamics in China as it relates to <unk>.
Obviously, your shutdowns and just general ongoing.
Dynamics.
Even as it relates to say doing business development with U S biotechs.
For example, I noted in the Q.
More updates around security measures.
Restrictions around cross border data flow and data information on Chinese patient. So maybe just make some high level comments about that because it's certainly an issue that has has.
Been weighing on investors. That's question number one and then just a question number two I know previously the company has suggested NRG Ellis possible or at least some discussion for devices shall I just wanted to hear an update on that since lunar is coming for TTM and that could be important. Thank you.
Great. Thanks, Mike.
No.
Ill probably get started on your first question.
Maybe taught that also can kind of tied into the BD front.
The conviction comments.
From any overarching regulatory point of view.
And then what was your second question in relation to the Covid situation or the college operating environment due to the our flare up it is a reality we've been talking about it and I'm sure you've seen it.
It's more of a global phenomenon and spending a lot of time covering it now this year.
And really from early on this year and really throughout we happen.
Sort of discussing about how we've been able to operate.
Operator.
This environment will continue to execute well and we've been able to show great durability and resilience.
Due to some of the specific kind of creative things that we've been doing.
But it is a I mean, Michael I am not going to third quarter, I mean, EBIT, probably today, you're probably seeing us.
Flare ups happening.
In China, the continuation of a dynamic duo corporate policy.
So we expect to have additional sort of we're monitoring it very closely we're.
We're staying agile we're very confident that we can kind of ride through this environment and we'll hope for the best.
In terms of sort of getting into some type of normalcy.
In the not too distant future and if that happens, we think that will be sufficient even better and now in terms of the.
Your other question on BD.
Are there any sort of from a geopolitical or regulatory hurdles for us to continue to do BD deals.
Very poor strategy.
Poor transactions going forward, maybe I'll have John chime in here.
And then they come back.
Adam as you can.
Yes, Mike just on the second part of that question.
Short answer is there's been no impact.
There is no impact last.
Last year as you saw we've done many.
Significant deals.
We just announced the deal last month as Josh said.
Very reputable company in Seattle genetics for our commercial stage assets.
China is the second largest pharmaceutical market.
They're small companies or big companies it is too important to miss.
Only because of the commercial opportunity long poorly. It's also to help them accelerate their global timeline. If you look at the companies that do well in China, like perhaps AZ and others I mean, they're contributing 20, 30% of the global.
Patient recruitment in pivotal trials coming from China at.
At the end of the day, we are providing important medicine basic medicine.
Two patients.
So we do not think this will be affected.
Even though they are a great obviously geopolitical concerns around but so far <unk> XI.
All of our current deals out negotiating deals.
It is a topic to be discussed, but it's never been a roadblock for us or delaying any of our timelines.
Yes.
Also come back to you.
Number three question regarding Carmen and then.
And they say yes.
Some guidance about <unk>.
Including medical device in the national reimbursement.
Thank god, they definitely have been turn there huh.
Even though not all of the medical devices.
Concur that local companies sponsored.
First men.
Putting up international levels.
Sure.
So they're talking about in 232 to three year terms, so it's coming.
But they are talking about five to 10 years terms.
Even though.
No.
And our gallery in cruise ship more and more come and talk about number one how much innovation you'll have.
First in class.
Best in class.
Specifically this year highlight severity Gs so children stages. So that's all helpful to the positive ton.
That's great. Thank you great news. Thank you.
Sure. Thanks, Mike.
Thank you we will move to our next question.
And the question comes from the line of Yigal <unk> from Citi. Please ask your question.
Yes, hi, thanks, very much for taking the question I just wanted to follow up on the comments regarding the Nova versus Lora comparison, you're making obviously, it's encouraging to see the favorable loss trends and Laura So just a few questions. There can you comment on what percent maturity of the overall survival.
And are you seeing stronger trends in <unk>.
On the non BRCA group and then whats your current hypothesis as to why your China trials in the Nora trial, so far the OS is trending favorably, whereas obviously in the Nova trial from GSK didn't end up that way. Thank you.
Thank you Paul talk do you want to kick it off and others can chime in if needed.
Yes sure good morning, Paul Thanks for that question.
I think first.
Nora trial, we would expect.
To achieve.
The number of events in 2023, so we're well along toward maturity, but don't have a specific.
Percentage there.
What we can say is at this point, having looked at the data that the.
The numeric trend is.
It's favorable in both populations, but again I'd remind everyone that the study was powered for PFS in auto as well.
Disclose that data in 2023, when when the study is complete but we take patient safety very seriously and based on our analysis of the data given what we had what we know.
From the Nova study.
We feel confident that there is a positive risk benefit and the data we're seeing from an overall survival perspective.
As well, so I think thats.
Yes.
Probably the most important thing I'd keep keep.
Re emphasizing we do have a separate study a full phase III a full approval based on PFS.
I think in terms of what why we may see differences.
The most significant difference that we know in the studies.
Is the fact that we used an individualized dosing regimen.
Indoor eyewear.
The dosing based on weight with platelet counts between 203 hundred milligrams.
And we think that allows patients to stay on the drug have fewer side effects and get the full efficacy benefit that could be.
One of the reasons again as you know.
Looking at the Nova study.
It wasn't powered certainly for overall survival and all the challenges that come with crossover and otherwise. So again, we're confident in the studies that we see.
And China, and confident that we're providing a real and meaningful benefit to patients. Both in first line and second line all comers settings.
Okay.
And then just.
The commercial business obviously.
Other strong growth quarter on quarter, a 15% similar to last quarter or so.
The conclusion that the COVID-19 headwinds.
Given the comments you made earlier, but just in general we think the current headwinds are pretty much behind us and when would you feel comfortable given the initial revenue guidance for the June .
And then for claim loss, obviously, there was a very very strong rebound over the second quarter, you can elaborate a little bit on the dynamics there and then finally for opportunity obviously, you said reflect.
Year on year, it's been down a little bit relative to the first half.
Give us some thoughts as to how that trajectory.
Thank you.
Yes, thanks, Heiko on vedula.
I think I mean look we're still in a pilot operating apartment as we've talked about before.
But we'd be able to navigate this well we expect to continue to navigate it well.
While we don't give guidance.
Revenue and margins et cetera. At this time, we feel very good about reiterate our statement that that ULA is positioned to be the market share leader by no later than next year, and we look forward to delivering on that goal.
On Kinloch Youre right, we had a great great quarter and third quarter.
Now if you recall in the last earnings we mentioned that we adjusted the pricing to prepare for the NRG on negotiations clearly that helped.
Sort of drive some kind of.
Initial demand right off the bat and.
It continues to be endorsed.
Within the best practice guidelines not only in <unk>, but even in earlier lines as well it actually got a little bit of an upgrade on second line. So that could help build awareness for Kellogg. So we look forward to getting over the hurdle. If we can with <unk>, let's see if we can get to the rational pricing level that we like or that we can accept and next year under those sir.
<unk> status, we should have good trajectory.
And I think you were asking about the option on the last piece.
You are right. So we had a flat flat quarter year over year.
<unk>.
At just shy of $11 million.
And as you heard from the from the opening remarks.
We do expect to resume growth in fourth quarter and position ourselves well for 2023 and beyond.
What really it's been going on for opportune as you May know is.
<unk> had.
The market access strategy has been around the top cities.
Supplement the charts very helpful and Thats, a real growth area and in the large hospitals.
When you have and.
Cities like Shanghai, which has in the past, but even like telling do right towards the more recent one it's going to.
A more of an impact than let's say.
A nationally reimbursed.
Treatment option like <unk>, where we have more.
What kind of strategies to maneuver.
So I think those are the comments that we'd like to kind of a message to you.
So your thoughts.
There are two things I would like to add here first of all I don't I don't think so.
Claire.
Situations okay.
Especially the quarantine situation still not over.
Number two in terms, so far up to the major reason cost.
I always say is colby right, but also because of all the major hospitals now there are still people can take.
Hum.
And.
Century has to go through a very stringent.
And that sort of thing.
Waiting for.
Covid testing reports out of that.
Some lines there is a lag surgery taken on the.
Okay.
Dave two patient took a surgery, then but I'll put it all right. So this is also another recent costly.
Year over year with.
Davidson.
Further growth.
Got it thank you.
Thank you we will take our next question.
And the question comes from the line of <unk> Rama from Jpmorgan. Please ask your question.
Hey, guys. Thanks, so much for taking the question.
Two really quick ones from me.
$1 2 billion of cash one question, we frequently get is kind of what is the cash runway sufficient too and then on 11 O. Two of the internal pipeline program I think correct me if I'm wrong. This will be the first global study that dialog conducts on its own.
Should we think about the geographic breakdown of this study as you think about Asia U S EU and other regions. Thanks, so much.
Thanks, Adam.
We'll get the second question for Harold on your first question on cash runway, we feel pretty good about having have runway through 2025 as.
As we stated.
Our revenue even in this environment, we can we have a durable resilient revenue curve, we expect to see that we just flat out thing.
Got that.
Demand is there and we see it now we have some on the supply side issues with Covid, but the demand is clearly therefore for the for our portfolio of the trucks that we're trying to bring in.
So.
We feel pretty good about that and by the way that's including.
BD deals along the way.
Annual basis.
So with that I'll hand, it over to Harold on the second question on <unk>.
Yes, hi.
As Harold.
Yes, Greg This is D for Psi program, which is global is to go into phase III.
It is.
A drug which we've developed in house.
And which assets you remember had a very nice proof of concept readout. So we are anxious to move into phase two and we have to make to certain territories North America being one Asia being another one with <unk> being another one we do believe that we can place the study in various territories.
And we assessed the weighting and the feedback from regulations as to what.
What sequence to place it.
Thanks, so much for taking our questions.
Yeah.
Youre welcome.
Thank you we will move to our next question.
Please standby the question comes from the line of deviation from Goldman Sachs. Please ask your question.
Good morning, Thank you for taking my questions.
Two questions. The first one is really on the expense control because in the past nine months three quarters.
We have been controlling the <unk>.
Opex pretty well.
And just as Sop elimination now you are really extending the cash runway into 2025. So we're trying to understand a bit more on that what you have done.
Freezing the headcounts are laying off people and also have you de prioritize terminate any of the projects.
So we're trying to understand how you actually achieve that.
More importantly, looking forward at like 12 months.
What are the major milestone payment and you could potentially pay out at how big that could be.
Second question is really on car T. I think you have great with Cte youre kind of run a previous study so trying to understand on <unk>.
How you can design a trial in China, and how long does it take for the bridging study to be completed here in China, and therefore for the potential regulatory filing and.
<unk> T is going to be targeting very different therapeutic areas compared to oncology portfolio you have so.
And turns out to future commercial strategy what is.
Your current strategy current thinking of that thank you.
Hey, Thanks for the questions I'll take the first and get the clarity question to Harold.
Before the yes, I mean, the the controlling of expenses.
Topic.
Yes, I mean, we are the investments that we've made and the progress. We've made allows us to really not only maintain growth.
But also get into increases in productivity as well and clearly you see that.
This year, but I would say that in terms of prioritizing our resources, it's really embedded.
Sort of in how we operate the business and really in our culture. Even if you go back a couple of couple of years, you would've seen us talk about our very quickly being able to prioritize the resources.
Even our park per typing.
I'll start programs ahead of others.
If you look back you'll see that cadence and more specifically this year as an example.
Over the past two or three sort of filing cycles, we also announced.
Some some programs that we have to look at to be prioritize.
So that we can make sure to continue to grow.
And we're making good advances on the mid to late stage.
Clinical programs and also the operating leverage that's kicking in into our commercial strategy.
So.
I think that will continue.
And we feel pretty confident about that going forward.
And I think the part B of that question was on milestone payments now we don't disclose.
In our filings the breakdown of the details on milestone payments, but I can tell you I think there is a kind of a.
Confusion a lot of people get confused with these kind of what we call bio bucks of industry wide, you see pretty big numbers, a couple of hundred million dollars.
Over $1 billion in somebody's strategic deals.
But what I can tell you is that.
While we don't give guidance like next year or over the next 12 months.
The.
All of the payments related to development milestones that we have in a pretty broad portfolio I will just basically.
Say that it's less than a typical upfront payment for a deal.
Including the most recent one we did with future. If you just kind of soft I'll, just kind of give that framework. So the main messaging being.
Got it.
The actual payment that goes out it's quiet.
Quite sensible.
No.
Not material, which is also why we don't have to disclose it right because if there was material we would so.
I'll now turn it over to Harold for a second question on <unk>.
Yes. Thank you.
Thanks T situations is really evolving.
Half said reached agreement after negotiations with the Cte.
A bridging program switching steady for China.
That study.
We have currently an agreement and we are waiting the formal approval for that and once that is in house.
The program.
Sure.
We are currently.
Thinking of the study program.
Cannot go into great detail spending can see this much this will be very similar.
As this study design as the emergent studies that you know they had two identical emergent studies enrich and to which just read out and emerging three which is a copy emerged too. So we will try to mimic that which.
Slide modifications as needed.
So the design is clear.
Structure and the requirements that the regulators have on US is also very clear.
You said acute schizophrenia studies nowadays to take the total of.
Five weeks to execute the <unk> study, but obviously there is a follow up.
Then as far as the portfolio I think there was some question about that.
This is the first study in the area that we call Neurosciences.
Clearly have an interest to get into neurosciences with several of.
Other programs in neuroscience is is for instance, quite.
Dominant on the <unk> side of things.
Since we are running <unk> studies, and we are running obviously achieve GMT and so we are very familiar with the space essentially have the context in this space.
Thank you.
Got it thank you.
Thank you we will take our next question.
The question comes from the line of Jonathan Chang from SBB Securities. Please ask your question.
Hi, guys. Thanks for taking my questions.
First question on Tictac can't discuss your views on the opportunities both in cervical cancer and other tumor types and how much of a headwind or not the ocular toxicity is associated with the drug are alright, and then on the second question on the business development Brian .
This has been part of the year than in the past can provide some color on the considerations for this year and how you're thinking about.
Additional in licensing opportunities and looking forward. Thank you.
Yes.
Hey, John do you want to take these questions from Jonathan.
So thanks for the question that often.
First on the first question.
The ocular toxicity that Tim Dec has shown.
In a pretty low grade ocular toxicities so.
I think a lot benign.
Some of these other adcs.
Ocular toxicities.
It can be easily managed.
Through your typical eyedrops.
So I think the safety profile is actually pretty good for this ADC.
And then Tim Dec.
First in class product.
And it's a product, which especially in China is very relevant because cervical cancer.
<unk> is today 110000 annual incidence it has the highest mortality of or the.
Women.
<unk> diseases.
Especially relevant Charlotte because <unk> is only approved more recently.
Borgata cell and the vaccines to really drive down cervical cancer incidence, it's going to take decades.
Because these patients sort of emerged with the disease in the fifties. So you basically have to thoughtful words at least 10 to 20 years for that really to take effect. So we view. The incidence is going to continue to grow there is a limited number of treatment options.
It's really the only other.
Product thats available here.
So we believe <unk> targeted therapy.
We will be widely used by physicians in an area with high unmet need.
A medical need.
So in China.
And then also I think the other thing is for XI.
There's a lot of synergies because we don't have to add any sales force we can just.
Tagalong without niraparib ovarian cancer sales team.
So I think that side is also very advantageous for us.
Given the relationships we have.
Now on the second question for business development first.
Our ability throughout the year I mean last year, we had a.
At least from a quality perspective, a lot more deals.
And we did a number of very significant transaction admittedly.
Products like <unk> like <unk>.
Allografts.
I'll come every year, so first of all.
They are variability because of that.
So we have a very I mean, we always have a very high standard when we bringing assets it has to be globally competitive globally differentiated assets.
So thats first and foremost.
Now within that broader context, obviously this year.
Everybody because of the capital market, we have to be extra cautious. So we are taking approaches as we look internally as we look externally to add this additional land because we do have a very broad and diverse pipeline today, we have a lot of products to support our growth.
Our share price Unfortunately.
It's not where we hope it can be.
So we have to take that into consideration as we look at new BD opportunities as well, but look if theres another asset like in FY <unk>, we will be aggressive and will bring today and in addition to these regional opportunity we have global opportunities today, because today's market is different from last year. So on the business development perspective, Theyre more opportune.
<unk> that may offer rides, which may not be available in past years, including global rights, including 50 50 Global rights.
Biotechs in the United States and in China.
Be interested because of the conditions.
I think as Josh also made in his remarks. We are also looking at other types of deals, which can we help other types of companies to bring a broader portfolio assets to help them in China from a development as well as the commercial perspective. So we are busy so stay tuned.
I'm sure you'll hear more from business development.
Over the next few months.
Got it thank you.
Yes.
Thank you we will take our next question.
Our question comes from the line of seamless Vernon Fernandez from Guggenheim Partners. Please ask your question.
Right. Thanks for the question so just.
Two quick ones, just as we think about.
Correct T opportunity, just hoping that you guys could frame that opportunity for us in terms of the size of the market opportunity again, and perhaps when we might see a possible entry into the Chinese market in China.
And then just the last question.
<unk>.
Specific to the lunar study can you just help us understand what's what the timeframe is and if that were to fail how your investment behind that program what would work out. Thanks so much.
Hey, Seamus. Thanks for your question and maybe I'll get I'll address your second question first and then I'll hand, the second one too Jonathan John on non car T opportunity.
In China.
Or for lunar.
Yes, I mean, there are actually multiple shots on goal lunar is pretty significant Boston coming up pretty soon.
Probably early Q1.
And I think we'll go from there are some at the spoke previously about an opportunity to even get national reimbursement in.
In the future. So if everything goes well this will be a real sort of step change.
We're talking about.
Pretty big quantum step change and the real opportunity mass market opportunity here for tumor treating fields now same as to your question it lunar.
Data.
It's not cooperative.
There are other shop on board as well right.
Global Phase III trials going on right now and pretty advanced stages are progressing.
Cross pretty large tumor types as well so.
Good report yet is that kind of be all end all certainly not.
But we're hoping for the best and remain cautiously optimistic.
And we will make a data driven decision regardless.
Yeah, I think Oh.
Luna.
Alright.
And.
I don't think it should consider whatever that market rather than somewhere else.
Hi, Simon Hi, Jonathan maybe also to address your first question on <unk>.
Look I think.
It's a pretty sizable market opportunity.
The eight mill in schizophrenia patients in China.
We said there are other indications, which are working with <unk> to expand the lead indications schizophrenia. There are 8 million patients of which $4 million I'm currently getting active treatment.
The registrar.
And so I think you know that.
Well because I.
Not only on the safety side, but on the efficacy side for both the positive and negative symptoms.
Differentiations.
Given the product profile given that in this sector. There has not really been something innovative something this impactful on these different dimensions I think this product will make a pretty significant impact once we launch it.
And this market is also very concentrated.
D.
Psychiatric hospitals and some of the neurology department in the larger hospitals.
You do not need a large sales team to cover it.
We believe looking at other players in this market Youre looking at probably that 200.
Any sort of sales force.
We also have coverage in many of these hospitals with our neurology franchise with our opportunity then.
So I think there are definitely synergies there from a timeline perspective, I think how already mentioned I mean, we only need to do one abbreviated bridging study.
So it's a pretty quick and so.
Simple path forward and we'll give more guidance as we start that study.
Thank you I would like to turn back over to the lineup CEO with month to date for closing remarks.
Thank you operator.
I'd like to thank everyone.
Taking the time to join us on the call today.
We appreciate your support.
Updating you again and again.
Also next quarter.
Operator, you may now disconnect disconnect this call.
This concludes today's conference call. Thank you for participating you may now disconnect.
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