Q1 2023 Zai Lab Limited Earnings Call
Yeah.
Hello, Ladies and gentlemen, thank you for standing by and welcome to <unk> first quarter 2023 financial results Conference call.
At this time, all participants are in listen only mode.
Later, we will conduct a question and answer session.
And instructions will follow at that time.
As a reminder, today's call is being recorded.
It is now my pleasure to turn the floor over to Billy Cho, Chief Financial Officer silent who will make introductory comments.
Thank you operator, good morning, good evening and welcome everyone.
Recently issued a press release, providing the details of the company's first quarter 2003 financial results as well as we said product highlights and corporate update.
Press release is available in the Investor Relations section of the company's website at IR <unk> Laboratory Dot com.
Today's call will be led by bulk is not ideal dialogues founder Chief Executive officer, interpersonal she'll be joined by Josh Smiley.
President and Chief operating Officer Dr.
Rafael Amado, President and head of global oncology research and development.
The batches with oncology product candidates.
Hart, President and head of corporate development neuroscience autoimmune diseases will speak about progress we have made in those three therapeutic areas and I will discuss the performance of our market product and conclude with comments on our first quarter financial results.
Additional decades 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 with respect to our business plans objectives clinical trial sales and revenue forecast for our products and product candidates.
Regulatory applications and commercial launch it.
Such forward looking statements are not guarantees of future performance and therefore, you should not put undue reliance upon them.
These statements are subject to numerous risks and uncertainties and actual results could differ materially from what we expected for a variety of factors, including those discussed in our SEC filings.
At this time, it's my pleasure to turn the call over to <unk>, founder and Chief Executive Officer, and chair person doctors not to do.
Thank you Billy.
Hello, everyone. Thank you all for joining us today.
Our first quarter results and progress continues to demonstrate their life's potential global best in class it afford it.
Track record of execution.
Despite challenges from China Okay.
At the beginning of the year.
The positive topline results from the phase III Mercury three trial of car T is schizophrenia.
The positive interim analysis from the phase two you'd know what TD tool seven study from peak that you hadn't met concept further support our belief that these products provide important treatment options for patients in China and globally.
We're very excited about the unanimous recommendation of the U S jobs administrations Magic's E G E.
Court approval.
Your bathroom.
First passengers targeted therapy.
Patients with severe and life threatening infections caused by a little better.
Recently, we expanded our lung cancer franchise.
Reached our global coffee platform with a next generation D. L. L. Three antibody drug conjugate or ADC program.
Once we once here.
This global ADC program demonstrates our continued focus on the ADC space another extension to the global market.
This program complements our lung franchise.
Leverage our some capabilities developed CL one to three months here.
We look forward to seeing the adult <unk> patients.
I look forward to leading Si.
Next transformational stage of girls productivity and global opportunities.
That does support fee and help meet the strategic and operational needs of our business.
During the next phase of growth.
We are happy to announce that we have promoted Jeff maybe to president and Chief operating officer.
Just rich experience and strategic vision.
Further drill as a leading global biopharmaceutical company.
I'm not real mission to improve human health and now our corporate strategic goals of driving innovation in China and beyond.
<unk> now turn the call over to Josh Josh.
Amanda I look forward to taking on this new role for the company and continue to work with Samantha and the rest of our team to move our company forward.
I'm very excited about what is in store for us for the next few years that positions <unk> to be a leader in Biopharma innovation.
We're pleased with the overall environment this year in China for companies lifestyle.
Therapies that need significant unmet medical needs.
Mentioned as a result of the proactive steps taken by our team <unk> has established a good foundation for future commercial execution and strong financial performance.
Despite challenges from the COVID-19 reopening in China. During the first two months of the quarter Xylem continues to deliver solid growth and overall financial results are.
Our net loss in the first quarter of 2023 decreased 40% compared to the same period last year, primarily attributable to the increase in product revenue and non operating income.
And we expect strong growth momentum to continue throughout the remainder of this year.
Did you look continues to perform well with increased parts sales for ovarian cancer and we believe that juul that remains on track to become the leader in this asset class for ovarian cancer in China, starting this year.
Dropped in and our team continue to improve market access by expanding commercial insurance and supplemental insurance coverage.
As of March 31, 2023 opt in with covered by 96 municipal or provincial supplemental insurance plans up from 37 as of March 31 2022.
We're pleased to have added Kim lock in new direct to China National reimbursement drug list effective in March 2023.
As discussed earlier, we expect a strong revenue ramp up for these products as a result of their NR deal inclusion.
For FY <unk>, the first and only U S approved SDR and blocker with a pipeline in a product potential we're getting ready for commercial launch later this year.
As we communicated earlier, we plan to have a specialized and experienced team for revpar with approximately 100 employees at launch we're excited about its potential in China.
With respect to our 2023 strategic priorities, we've made progress towards the BLA approval of aftermarket demand for general generalized myasthenia gravis or gmg and the BLA submission for subcutaneous at quite good demand for <unk> in China.
Initiation of a bridging study for <unk> in schizophrenia in greater China.
Initiation of a Registrational study for <unk> in first line gastric cancer in greater China.
Full data readout of the tumor treating fields lunar phase III study in non small cell lung cancer.
We're also advancing our proprietary pipeline with global rights, including by initiating a global phase one study for CL 101, eight or CCR, eight and moving <unk> 102, our IL 17 dealer body in the full global development.
We recently released our 2022 ESG report that details our ESG strategy, which we call trust for life that's three.
Commitments first improve human health second create better outcomes and third act right now, we're benchmarking ourselves against commonly accepted standards and major indexes.
We're continuing to reach more patients with our existing commercial product and are preparing to launch eight additional products as we take the steps to achieve overall corporate profitability by the end of 2025 and reached 1 million patients by 2030.
And now I will turn the call over to Dr. Romano Raphael.
Thank you Jos.
First quarter 2023, sorry last oncology franchise continued to make progress on all fronts and we expect to have a very productive year.
Recall that earlier this year, our partner Novocure announced that the lunar clinical trial met its primary endpoint, demonstrating a statistically significant and clinically meaningful improvement in overall survival when Citi field therapy, what's added to standard therapy compared to standard therapy alone in patients with platinum resistant non small cell lung cancer.
We recently announced that the data will be presented on the morning of Tuesday June take as a late breaking abstract getting customers static non small cell lung cancer session.
We are pleased to have contributed and be part of the lunar study.
In China, the incidence of locomote cell lung cancer as well over 700000, new cancers per year or 37% of all non small cell lung cancer diagnosed worldwide annually.
439% of global debt due to non small cell lung cancer each year.
We look forward to the presentation of the data.
Excited about the potential of <unk> to address such enormous unmet need for patients with lung cancer as well as for patients with other tumor types are subsequent results readout.
As Samantha mentioned in April our partner Keygen presented encouraging efficacy results from the phase III, Nova TV towards several study a kickback in patients with treatment refractory head and neck parts there too.
2023.
Making.
The data cutoff. The confirmed overall response rate was 40% with one complete response.
As a responsible.
Ft profile was generally consistent with that observed.
If that monotherapy clinical study.
Treatment for head on Mcarthur remain a significant unmet need in China with approximately 71000, new customers annually.
Following progression on first line standard of therapy.
Limited treatment options.
Immunotherapy and chemotherapy had low objective response rates with poor outcomes, while more data are required to expand on these results. We believe that that could be a promising treatment option for patients with recurrent or metastatic head and neck cancer and we are planning to pursue this indication in China in collaboration with CJ.
Okay.
Moving now to <unk> or at the graph there our partner Marathi presented updated data on the Crystal one study in patients with pancreatic adenocarcinoma.
Cancer, another solid tumor harboring <unk> mutation at the plenary serious program.
April session of Vasco subsequently just a result of the rapid communication in the journal of clinical oncology.
They both showed an objective response rate of 35% of the overall cohort in.
In patients with pancreatic cancer at the objective response rate was 33%.
For patients with biliary tract cancer it was 42%.
Notably the safety profile of <unk> was to align with that previously reported in patients with pretreated non small cell lung cancer and colorectal cancer.
These findings demonstrate a meaningful improvement relative to our historically reported thunder of cure or discounters.
And we are very pleased to see the results of the phase II study, which demonstrated a marked improvement on the current standard of care for patients with unresectable or metastatic camera detour obtained mutated solid tumors, including gastrointestinal cancers, where few treatment options exist.
We look forward to closely working with Marathi to advanced had aggressive as a potential best in class treatment option for patients with tumors harboring Kras <unk> mutation.
Moving to our internal global research and development programs, we presented no translation on clinical biomarker data from our global oncology program. The VL 1211.
Pinpoint a specific antibody at ACR showing that it does.
Two one wireless monotherapy seemed to be tolerated well and showed early signs of anti tumor activity.
In addition to that we're expanding our pipeline into the antibody drug conjugate or ADC PE and building a portfolio potential first and best in class ADC through both internal discovery and external collaborations.
Last month, we increased our lung cancer franchise, and greater global oncology pipeline with a next generation ADC program <unk> 310.
This compound is an innovative CLO three ADC recover by using <unk> proprietary <unk> platform.
Donlin is a next generation ADC platform designed to leverage the tumor microenvironment to overcome the challenges and current ADC drugs.
<unk> III is an inhibitor if they are not selling them.
Breath in small cell lung cancer neuroendocrine tumors.
We will leverage our global development capabilities to advance this product into clinical study.
Yeah.
We are on track to meet other milestones this year, including the initiation of them by system gastric cancer trial in China on the filing of a protracted core Russ one mutated non small cell lung cancer with an abundance of potentially best in class and first in class product both in China and globally. We are very excited about our expanding oncology.
Pipeline.
And now I will turn the floor over to Dr. Harald Reinhart to discuss the progress in our autoimmune infectious disease and neuroscience therapeutic area Karl.
<unk>.
Thank you Rafael I am excited for the opportunity to share with you today progress cross autoimmune infectious diseases and neuroscience therapeutic areas.
Let's start with <unk>, the combination of phenomenal interest P M, which.
Which we're developing with our partner <unk> in acute schizophrenia.
Results from Corona has emerged three trials were released in March 2023.
This is now the third passenger interest region, a trial that has met its primary endpoint.
<unk> I haven't seen any reduction of $8 four points in pans total score compared to placebo at week five.
<unk> T also demonstrated reductions in positive and negative symptoms of schizophrenia as measured by pants positives and negatives and pants negative smarter factories, subscales, which have secondary endpoints in the trial.
Kona plans to submit a new drug application to the FDA in the third quarter of 2023 with launch in the second half of 2024 if approved.
As Matt mentioned.
It could be a very important treatment option as a new class of medicines for schizophrenia patients in China and globally.
Our proposed development plan for China has been accepted by the MBA.
We are on track to start clinical bitchy tracking in June .
Regarding our infectious disease portfolio. The FDA Advisory Committee recently unanimously voted in favor of approval of <unk> that can do the math.
We will do it.
We are excited about the committee's strong vote of confidence.
We submitted an NDA for the treatment of Cobre, Panama resistant acinetobacter infection.
Infection to the NPA in December 2022.
To review granted one months later.
And in February the NDA was officially accepted by the NFPA.
We look forward to bringing this novel drug to China into Asia Pacific, where severe cramping sanctions have frequent and often can no longer be adequately treated because of multi drug resistance.
Much progress was made this past quarter in this guide for FY <unk>.
Mark.
We submitted the BLA for <unk> IV for the treatment of patients with generalized myasthenia gravis with gmg in China in the second quarter of 2022.
And expect approval and commercial launch this year.
We also expect to submit the BLA for <unk>.
In Q.
TMT in mid 2023.
We continue to support our partner <unk>, an indication expansion in China and worldwide.
That's at least for our internally developed topical IL 17 product.
11, though too we're moving forward with pre clinical and regulatory activities in preparation for our global phase two trial.
Let me now hand over to Billy who will speak about progress with our commercial products and financial results.
<unk>.
Thank you Harold.
Now I will discuss our first quarter 2023 financial result, compared to the prior year period.
Net product revenues for the first quarter of 2023 were $62 8 million.
Compared to $46 $1 million for the same period of two representing 36% year over year growth.
This included net product revenue of $42 $7 million for July compared to $29 $6 million for the same period of two representing 44% year over year growth.
$13 $3 million for opportune compared to $12 $8 million for the same period in 2022 one.
$1 3 million for Kellogg compared to $3 million for the same period of two and $5 $5 million from the xyrem compared to <unk> $7 million for same period last year.
Note that net product revenue in the first quarter of 2023 included a negative $3 9 million nonrecurring adjustment to compensate distributors for sales of can lock into Zara at prices prior to the price reductions made in connection with the initial inclusion Indian RTL such.
Such sales rebates to distributors on previously purchased product are customary in our industry. The compensate those distributors for the new in our deals on price.
Research and development expenses were $48 $5 million for the first quarter 2023, compared to $53 $9 million for the same period last year.
The decrease in R&D expenses was primarily due to cost sharing compensation from collaboration partners related to our clinical trials.
Offset by higher payroll and payroll related expenses increased R&D head count.
SG&A expenses were $52 5 million for the first quarter of 2003 compared to $57 million for the same period in 2000 places.
The increase was primarily due to higher professional service fees and in connection with sales of our products in greater China, and higher payroll and payroll related expenses from increased commercial headcount a dialup continue to expand and invest in its commercial operations in China and infrastructure in the United States in anticipation of substantial growth over the next few years.
<unk> reported a net loss of $49 1 million.
A loss per share attributable to common stockholders of five states for the first quarter of 2003 compared to a net loss of $82 4 million for the same period, it's about a point to where he loss per share attributable to common stockholders of night that.
The decrease in net loss was primarily due to product revenue growth faster than operational expenses and the increase in nonoperating income, including interest income and foreign currency gain.
As of March 31, 2023, cash and cash equivalents short term investments and restricted cash totaled $931 4 billion.
Compared to $1 billion as of December 31, 2022.
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 one one at this time you will then hear an automated message filing Yohan is raised to withdraw your question. Please press star one again, please standby, while we compile the Q&A roster.
Our first question comes from the line of Michael <unk> from Jefferies. Please ask your question Michael.
Thanks. Good morning, then we had the two quick questions.
One of Cartage Ahmad I know that you guys are waiting for approval.
Can you give us an update on your expected timing and ramifications for your expectations for.
Kitimat and for an RTL and what the timelines are for that and what our expectations should be for NR Dl for 2024, and how that would work with the timing of approval.
First question and the second question is obviously there are a lot of that focus are the DTF lung cancer data coming up at <unk>, you mentioned that in your prepared remarks can you help us understand the ramifications of that result, poor China, particularly.
As it relates to the strength of the data with combination with PD, one, but not their should talk show and the use of PD. One in second line and how you expect that to be important for China. Thank you.
Hi, Michael It's Josh good good to hear from you I'm going to direct the questions to our executives. This morning. So I'll start on <unk> direct it to me and then Raphael can talk a little bit about your question on on lunar and <unk>.
As you know theres not a paducah date.
In China for upward.
Reviews, our approvals, but I can say is the.
We're in discussions with the regulators.
Theyre going well and we're looking forward to a potential approval and once we have that we're prepared to move quickly to launch.
We mentioned in.
In my comments, we have.
Planned to have about 100 sales reps.
At launch ready to promote the product.
And we'll be moving quickly then.
Toward developing packages and strategy sprint RTL, we need we need an approval sometime over the summer I think fit to fit into that window, but again, we'll keep you updated as we continue to go through everything is going well and we're excited about the opportunity.
Raphael maybe you could address Ah lunar please.
Sure.
Alright.
Uh huh.
But the implications of that data for China. Clearly this is a second line study. So the question is.
Most patients receive.
Check point inhibitor seeing product line and therefore.
The data.
Good day.
That's a significant clinically meaningful.
Yes.
Ah.
Applicable.
Patients that received in personal lines I think the answer to that is that not every basin rapidly.
<unk> Tec pointing holders in frontline, particularly patients with mutations with Egfr mutations resistant mutation often times. The addition of checkpoints don't tend to add that much benefit and they may get it in second line. So there is some flexibility there.
There is also some evidence I think which is really demonstrated in this study.
Synergy between <unk> and <unk>.
Checkpoint inhibitors I think.
We will be able to.
Corroborate in the frontline study with keynote B 36, I think.
Study would really established.
The synergy that we believe is observing and lunar and as you know the standard of care in non small cell lung.
Clearly evolving.
There will be new agents.
Different ways of treating patients as new entrants come in so I think we are pretty excited and share the enthusiasm.
Here on this data set that really shows, particularly with synergy with.
The ICI.
And <unk> fields.
Based on the pattern of treatment in <unk>.
China, there will be patients that will definitely benefit from this combination.
Thank you just to be clear for Josh we acknowledge we didn't want to get approval by this summer and if there is a deadline that we need to hit our deal that's correct yes.
Yes, I mean, we would like approval as quickly as possible for sure and as I say we're at.
Reviews are going well I think to be eligible for 2024.
Negotiation, we would need to have an approval over the summer and again things are going well, but we don't know until we got to we got it so we'll keep everybody updated.
Got it thank you guys.
Operator next question please.
Thank you. Our next question comes from the line of ego nurture <unk> from Citigroup. Please ask your question Yigal.
Oh, Hi, yes. Thank you.
For Bama can you just talk about the timelines for running the phase III in first line gastric when could that trial readout and when or what is the current view on when that study.
Drug could launch in China, and then you also mentioned in the press release that you are joining two global phase III Fortitude $101 40 to 102.
Can you just explain the differences between those two trials both in first line gastric.
Sure Yes. Thanks for the question I think Raphael these are both for you.
Yes, sure I'll start with the spectrum part of the question.
Yeah.
There are two studies in gastric cancer the standard of care.
It tends to be for <unk>, plus a PD one inhibitor there.
T Rowe.
Or <unk>.
That is really the way that.
Most patients are treated.
Some variation of chemotherapy.
We sometimes use.
There has been.
Sure.
Our studies have not used PD one because this started before the <unk> came about so that's why we have two studies 1246.
There's enough on the other.
This amount with chemotherapy plus PD one.
Second one sorry.
We are in the process.
Getting it going.
On both.
Our south but we obviously have made the decision to participate in that trial.
So the first approval, we will be with chemotherapy alone.
And that trial is ongoing from London.
There's been some discussion about the level of expression of <unk>.
<unk> two.
Sure.
And we.
Eddie.
Recently actually.
We're just automating issue having to do with a diagnostic.
I'll take et cetera, but the study is ready to start and it will be shortly after followed by the ticket study which is.
Normal.
So with regards to timeline.
It will quality scores.
It will have a filing in some timing Tony.
Okay.
Okay, great. Thank you very very much.
Thank you.
Our next question comes from the line of Anil.
<unk> Rama from Jpmorgan. Please ask your question on the pumps.
Hi, This is priyanka on for Anna.
We just had one question can you give us a preview on what to expect at the Investor day, and if theyre going to be more of a pipeline our development focus or is it more focused on commercial dynamics and potential pipeline products in China. Thanks.
I Priyanka, it's Josh I'll start and then Billy please.
Jump in but.
We have not had an in person investor day for quite some time.
And but this was a good time to do it, particularly coming out of <unk> and some of the updates that we'll have there. So we will focus on certainly on the pipeline on.
The eight launches that are coming as well as a law.
Look into our discovery strategy in some of our earlier.
Global developments, we will talk about the commercial dynamics and outlook for the medium term for the firm, but really I think our primary goal here is to give investors a little bit deeper insight into the the breadth and depth of our pipeline and the things that are coming sometime soon Billy if you have anything to.
Add please do.
No that was well covered to us we will be sending out a save the date to all of our investors and sell side probably.
Probably sometime this month.
Followed by.
Some more details around the agenda, so stay tuned.
Thanks, so much.
Great. Thank you.
Our next question comes from the line of Jonathan Chang from VEB Securities. Please go ahead Jonathan.
Hi, guys. Thanks for taking my questions and congrats to Josh Christine.
First question in the context of a broad and expanding pipeline.
Commercial and clinical stage assets, what do you see as the most meaningful growth drivers for the company in 2023 and beyond and my second question can you tell us more about that one.
1310.
Construct itself and the timelines associated with the program and discuss your thoughts on pursuing DLL three with an ADC versus <unk> specific T cell <unk>. Thank you.
Great. Thank you Jonathan and thanks for the congratulations I think on growth drivers.
I'll make a couple of comment that's got Samantha to weigh in and then we'll turn it to Raphael to talk about the deal DLL three I think on growth drivers. Obviously, we're we're quite excited about the launch upcoming launch hopefully about <unk> and as I mentioned, we're well prepared.
Third to hit the ground running there we've learned I think a lot from the very successful launch in the U S and I think a lot of the dynamics.
Led to success in the U S actually can and should play out in China. So certainly we're looking forward to that as a new growth driver is the jewel AR continues to perform well and we would expect as we mentioned upfront <unk>.
Continue to grow share in that class.
Secure our place as the market leader and continue to drive penetration, particularly in the first line setting.
As we sort of.
<unk> IRA and Ken Mark on NR Dl.
Beginning in March will drive good volume and good revenue growth for the remainder of 2023 I think as we get into 2024, then looking forward to that next wave of potential launches. It again that in that period, which could include.
TT fields for lung cancer repo attracted nib.
We've talked a little bit about that as we get a little bit farther out number two the mab attic or asset <unk>.
<unk> so.
There are a lot of growth drivers I think.
Again for this year, it's execute on the four products that we have in the market.
Be ready to launch.
Well with <unk>.
I don't know if you want make any other comments on 2023 and beyond.
You have no conflict pretty well.
Yes.
Maybe we can go to Rafael to talk a little about that.
Our most recent.
Deal with that.
Hello.
Yes, hi, so yes.
1310.
We were pretty impressed with the preclinical activity of this product.
I see now you have to give back because if it's a complement to our ADC pipeline.
And as you see are based on antibody.
The specificity and ability of the antibody.
Quite good for the targeting DLL three.
And then the payload linker.
But in this case the benefit risk of <unk>.
The product is.
Payload topoisomerase inhibitor.
And it has really high potency.
Clear and better mobility.
So we so as a consequence.
Very good efficacy and Tolerability.
In preclinical studies.
As opposed to other adcs.
Less stable linker said, our non covalent.
Again, a covalent linker.
And.
It actually releases in the tumor microenvironment.
There are other linker said actually.
Don't allow.
The payload to remain volatile and therefore.
Broadly toxicity, such as high toxicity, RASK minus depression et cetera, and here, we could see a very stable PK and be able to increase the dose to relatively higher level.
So.
Because of that.
Also because this company also has a more advanced product.
They are also moving ahead with.
<unk>.
It seems like.
The technology that was superior to many other ADC technology. So we've seen out there. So that's how we chose we could have chosen to perhaps a bispecific.
By technology, Theyre demonstrated actually impressive activity.
In a difficult setting.
Refractory second line small cell lung cancer.
And we have our own by specific in the CD 20 space with Regeneron.
But here because of the potency on the potential higher benefit risk given the stability of the linker.
And.
Trying to to affect the avoidance of Crs and other.
All types of <unk> cone by specific we opted to use an ADC and then in terms of why we chose CLO equity.
Well, it's a target that's been validated by <unk>.
Peter.
Great.
A real unmet medical need and I think also.
The opportunity to expand in neuroendocrine tumors, which is an area, where there hasn't been really a lot of progress.
I think.
The collection.
Information that led us to really too.
This product as our next ADC to moving to IMD.
In the near future.
Got it thank you.
Yes.
Thank you.
Our next question comes from the line of <unk> Chen from Goldman Sachs. Please ask your question.
Alright. Thank you. Thank you for taking my questions.
A couple of questions number one is.
Now you are running more than 15 assets in a clinical stage.
While based on first quarter and also a third quarter fourth quarter, you have been controlling the budget pretty tight.
We're trying to understand how would you allocate the resources properly to make sure the programs the progression of those programs could potentially make you ahead of peers and competition and how you kind of prioritize some of the key assets.
Second question is more specific on <unk>.
Is there any updates on the record each time I for progressive in China.
Where should we expect more visibility now they are trying to filing strategy.
Particularly what are the factors that management are considering while trying to determine the filing plant in China. A quick one also on ADC as this is probably the first time.
We saw a satellite with partnering with one of the local players by St. St. Their assets.
So does that mean that you have been changing your strategies.
You have been more looking into potentially domestic biotech company to collaborate.
Those are my three questions. Thank you.
Thanks for the questions and we'll try to cover all three built.
Maybe you could start on resource allocation.
Raphael can talk about <unk>, you can make any comments by Raphael about business development that Jonathan maybe you could provide some.
Broader context around our business development strategy.
Start with Billy.
Thanks for the question.
So.
I think at this point and dial at sort of what I would say relative scale organizations lifecycle.
We think that we have turned the quarter, whereby we're going to be able to.
Make sure that we achieve our strategic priorities I E.
We have about eight.
Anticipated drug launches over the next two and half years or so.
They report to us clearly.
While maintaining.
Kind of a level of growth at park tickets take time. So therefore, you saw a snapshot of that.
In our quarterly results were.
Yes from nonoperating items, such as interest income and foreign currency gain.
But if you actually see the operating line items, you would also see recruitment profile, namely that revenue is growing faster than expenses.
You should expect that to continue.
From here on out so year after year from here on out we expect to see our financial profile and operating basis look better and better.
And that gave us the confidence and it felt like the time early on this year to make a commentary to the public debt.
We expect to we hope to we target to reach commercial profitability this year.
And overall profitability by end of 'twenty five so this was something that we expected.
We're starting to see from here on out now theres going to be of course, a quarterly quarter over quarter action, but year over year, we felt very comfortable that you can.
We're.
It starts to see improving financial picture. So that includes right that bakes in making sure that we execute on all of our priorities including.
The anticipated launches we talked about.
Raphael maybe you could.
Copper alley.
<unk>.
Sure. Yes. So we obviously are pretty excited about how that got qualify.
Data in second line lung cancer.
Data in colorectal, which we referred to at the prior year previous earnings call on the data that I am.
Good day.
In pancreatic as well as biliary tract because this is across solid tumors with T C.
It's performing extremely well so we are very eager to get this product.
Bruce.
Possible obviously.
We are participating on a number of.
Pivotal trial.
In lung cancer, and we are on K 12, which is the second line.
Friday against Docetaxel and.
We will participate in the frontline and we're also in the colorectal cancer study as well.
Our filings with base.
In.
Getting data from PFS on K, 12, and that would be that would be something towards the end of 2024.
We are always looking for ways to accelerate the filing obviously, we can't really control the approval because of lack of paducah timelines, but we can't control whether or not we can.
Working with CD accelerate the filing so we are we would try to leverage.
Dave.
Data from these patients to see whether we can file earlier, obviously no promises stay tuned and we'll see whether thats the case, but.
Right now.
The base cases, and a 24 and hopefully it will be sooner and I will just make this comment that.
Apparently won't be approved in China, and there are some domestic product.
One of them have breakthrough designation in <unk>.
We have Chinese patients so they have an advantage.
Over that.
With.
That's why we are eager to leverage K 12.
But this product really are very early.
Great. They don't have a lot of durability.
PFS.
A follow up.
Our survival.
So we don't believe that.
Are behind in this field.
Really competition.
But we will do our very best to try to make it available.
As soon as possible and the last comment I'll make I don't think we made any.
Any any comment to this last time, but we did start a PK study, which again is required.
Filing and we finished they'd already actually.
So when we go to <unk> to discuss these timelines.
More data.
From Chinese patients with PK.
This helps stay tuned hopefully we'll be able to give you a more granular data.
As we continue our discussions.
Jonathan I think.
You can make perhaps a comment about that.
It would be about three.
Yes.
Thank you for the question on the BD strategy first of all it's not a change in strategy.
I'd like to see it as an evolution in our BD strategy in fact, I think our BD strategy multi calls.
So there are couple of elements to it number one I think we'll continue to do those type of deals.
Which maybe we are more well known for the Marathi.
And what's the late stage assets with regional rights.
The latest setback, obviously with Seattle genetics.
In this deal.
The second part of that strategy.
Which is to help the company applied global rights and complement our in house discovery strategy.
I think if you look at the success in BD as it really comes from the rigor scientific evaluation.
And our scientific team is very good uptick in assets. So we want to leverage the strength.
And extend these greensville right gross global right.
<unk> areas.
<unk> ADC.
And others, where we're already building a portfolio of very synergistic assets.
And today, whether those assets come from globally or come from China in the case of Adcs I think China is actually.
We're not making a lot of positive progress.
Nicola company in particular assets.
Sean are demonstrated very promising.
Early data.
So we're very excited by it.
We made two more deals with these type of profile.
Going forward and I think as we evolve as a company certainly BD will continue to evolve and there'll be other ponds that element.
Hopefully, we'll see more.
More about other type of creative deals that would be future. Thank you.
Thanks, Jonathan next question operator please.
Certainly.
Our next question comes from the line of Siemens Fernandez from Guggenheim Securities. Please ask your question great. Thanks, everybody.
Thanks.
Just a couple of quick questions. So first just on <unk>.
Can you just help us understand what kind of <unk>.
Commercial presence is likely to be necessary.
For the launch to really capitalize on the size of the overall market opportunity can you just sort of remind us how.
How the sort of.
Relative generic utilization is in country versus kind of the undiagnosed patient population just trying to get a better sense of.
How we should be thinking about the commercial launch.
Of correct.
Post approval and then second question.
It's really just on <unk>.
How youre thinking about the opportunity for another topical agent in the treatment of psoriasis.
That that area has been relatively slow to come on with two new agents.
In the space.
Those agents.
<unk>.
Have good efficacy, but what we continue to see across the board or challenges as it relates to <unk>.
Both to net.
Dynamics in that market.
<unk> reimbursement coverage. So just how are you thinking about that opportunity for the topical IL 17 in the spend.
That youll be pursuing associated with it is it perhaps an opportunity to pursue Hs.
Or other.
<unk> opportunities outside of purely psoriasis. Thanks.
Thanks, Seamus, it's Josh I'll make a brief comment on sort of commercialization, but it really went parallel to dive in on both of the topics I think as it relates to <unk> and the commercialization opportunity.
You are asking.
Or there are about 8 million patients with schizophrenia across China.
<unk> 4 million of whom are seeking actively.
Seeking care.
Equivalent of psychiatric wings or psychiatric hospitals in major settings. So I think our view at launch is probably.
Somewhere in the range of 200 sales reps or so can cover.
Heavy treatment centers.
Generics are prevalent I think got it certainly.
Like Olanzapine and others I think are well.
Well utilized in China today, but I think Carol can talk about the opportunity that <unk> presents in terms of either patients who aren't responding well to current therapies or that the benefits from compliance and otherwise that may come and then Harold you can you could talk a little bit about that.
Why we're excited about the iOS app.
Yes.
Yes. Thank you.
First corona and the kind of X T compound.
So different from existing anti Psychotics schizophrenia treatments. So that we really see this as a great opportunity to either complement existing rates humans as an adjunct.
As a stand alone and as the <unk>.
We could see was clearly shown in the lab studies the <unk> Suisse.
Another.
We see confirmation of trial, that's really shown.
Efficacy of this drug in this patient population with a similar kind of efficacy signal that we've seen in E. One and E. Two.
So with that said I think this is.
A new area in the market and in China as fully detailed in previous meetings.
There is a lot of undiagnosed schizophrenia decent effort by the government to activate more schizophrenia treatment in the country. So we see this as a great commercial opportunity.
And regarding the second part of your question about $11 two in the use of topical <unk> in psoriasis, where there are already quite a number of treatment options recently to Peter off was added and <unk>.
Both of those drugs are quite different from ours.
Just would like to bring out again, the uniqueness of $11, two which is an IL 17 domestic basically blockers that were similar to the most active drug class for this disease. So we see this as well.
Way to bring.
What is currently the best treatment by some Q treatment or IV treatment due mainly to the skin.
Proof of concept study escalation that we achieve penetration and early success in clinical markers of benefit.
So we see ourselves in a very unique situation.
One of which.
On the topic of treatments exist.
They have systemic absorption issues and the overall.
Results.
Well documented however, they are not on 17 the metrics that are currently really the leading drug class in psoriasis.
To answer your question.
Thank you Harold next question please.
Thank you.
Our next question comes from the line of young Kwon from Credit Suisse. Please ask your question Yang.
Hi, everyone. Thank you.
Taking my questions I have two quick ones first.
First quarter commercial commercialization progress so we saw year over year.
Product revenue increase.
6%.
Look pretty strong and then concerning first quarter or there are still some.
Covid impacts hitting in January and also Dl.
Yes.
Kind of effects or one off so my question.
First question is for the remaining call it ourselves this year.
Should we expect kind of accelerated kind of commercial progress given.
There will be no impact on that.
<unk>.
Potentially there being more volume momentum.
First question second question is on <unk>.
<unk> key.
So you mentioned that youre going to initiate a bridging study pretty soon this year.
Give us more color on the design and the scale and the potential kind of timeline.
<unk> also now.
Ill says bridging and starting for car T.
Great.
Thank you for the question Samantha if you can cover the first one which is sort of commercial outlook for the year and COVID-19 impacts than other other things that are going on and then obviously Harold you cannot talk about Corona.
Steve.
Sure.
Samsung.
For the question.
Yes.
First two months in China.
<unk> is the Covid impact.
So I think you said.
<unk> inclusion.
Yes.
However, going forward.
Start from March we have seen.
The.
Much like for Colgate.
And we are optimistic about to continually to deeper.
Our goals for the rest of the year.
Great. Thanks, Harold do you want to add.
The question was about the clinical study for <unk> in China, which is about to start it's actually almost imminent to start out with the design.
Very similar almost identical to the merchant program studies.
Inducted by Corona.
It has the same kind of dose.
Ramping schedule.
<unk> seen the Suvs or trying to mimic the design the duration.
Details.
<unk> as it was seen in the global program.
As far as the timelines as I said is about to start.
Just finished our PK study, which was also on track, which allows us to feel confident about the clinical trial overall and.
We seek that.
Was your question.
Some pes.
Okay. Thank you. So we went to we expect we can finish it.
<unk> sorry.
Okay.
It is at this point in time, no clear understanding how long it will take this is the first study in a long time with a new demand. So we have certain expectations. We think we have to cintas lined up. So we do believe this can be done rather expeditiously, but I think this will be for <unk>.
<unk> conference call to get more clarity on.
Okay, great. Thank you.
Thank you.
Our next question comes from the line of Rebecca <unk> from Bernstein. Please ask your question Rebecca.
Hi, Thanks for taking my question.
So.
Specifically on the two products that are already covered by an RTL. We saw that no sorry, I had a lot of growth in Q1.
But the other one can lock.
Negative growth and even after we adjust for those $2 five $3 9 million rebate.
So in that decline.
So could you help me understand better what's actually going on can lock and when will when do you expect the volume release effect from two <unk> to take place.
Thank you.
Thanks, Rebecca it's Josh.
Just to remind everybody that those two products were added effective March one so in Q1, you're really not seeing a.
Real look back.
Our Dl listing we're making good progress in terms of.
Pulling that through to the local hospitals. So you should expect to see good.
Ken Mark volume and <unk>.
Net sales growth over the next three quarters.
As Samantha mentioned I think across all of our products, we saw a little bit of.
Got it.
Challenges in the first quarter just related to cope it again not different than what youre seeing across China based.
Sales and marketing efforts, but we're quite confident that the volumes will youll see them beginning in Q2 from both use IRA and in Denmark.
Thank you okay.
Thank you I'm showing no further questions at this time I will now turn the call back to Dialup CEO , Samantha Du for closing remarks.
Thank you.
I want to thank everyone.
<unk> taken the time to join us on the call today.
We appreciate your support and look forward.
Can you again after the second quarter of <unk>.
Operator, you may now disconnect this call.
Thank you that concludes today's conference call. Thank you for participating goodbye.
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