Q2 2024 Zai Lab Ltd Earnings Call

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Christine Chiou: Hello ladies and gentlemen, thank you for standing by and welcome to Zai Lab's second quarter. This time, we will conduct a question and answer session, and instructions will follow at that time. As a reminder, today's call has been recorded. It is now my pleasure to turn the floor over to Christine Chiou, Senior Vice President of Investor Relations. Please go ahead. Thank you, operator. Good morning, good evening, and welcome to Zai Lab's second quarter, 2024 earnings call. Today's call will be led by Dr. Samantha Du, Zai Lab's founder, CEO, and Chairperson. She will be joined by Josh Smiley, President and Chief Operating Officer, Dr. Rafael Amado, President and Head of Global Research and Development, and Dr. Yajing Chen, Chief Financial Officer. Jonathan Wang, our Chief Business Officer, will also be available to answer questions during the Q&A portion of the call. As a reminder, during today's call, we will be making certain forward-looking statements based on our current expectations. These statements are subject to numerous risks and uncertainties that may cause actual results to differ materially from what we expect due to a variety of factors, including those discussed in our SEC filing. We will also refer to product revenue growth rates on a constant exchange rate basis, which is a non-GAAP financial measure. Please refer to our earnings release, furnished through the SEC on August 6, 2024, for additional information on this non-GAAP financial measure. At this time, it is my pleasure to turn the call over to Dr. Samantha Du. Thank you, Christine, and welcome, everyone. In recent years, Zai Lab has grown significantly. We have built a strong commercial infrastructure, developed a promising portfolio of global and regional assets, and established an exceptional and efficient team across our commercial, R&D, and functional areas. Today, Zai Lab is at a pivotal moment, advancing towards each of our three strategic imperatives: driving pipeline growth, expanding our pipeline, and achieving profitability. In the second quarter, we made great strides in all areas. Over the second quarter, our product revenues grew 45% year over year, surpassing 100 million dollars for the first time. The success of Vickart's launch significantly contributed to this growth, demonstrating our ability to provide innovative solutions that meet a mathematical need. Vickart has rapidly become a cornerstone of our current portfolio and is poised to be a major driver of our near-term growth. We also made significant progress with our pipeline.

Operator: Hello, ladies and gentlemen. Thank you for standing by, and welcome to Zaii Lab's second quarter 2024 financial results conference call.

Speaker Change: Hello ladies and gentlemen, thank you for standing by and welcome to Zaii Lab's second quarter 2024 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.

Operator: 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 Christine Chiou, Senior Vice President of Investor Relations. Please go ahead.

Speaker Change: As a reminder today's call has been recorded. It is now my pleasure to turn the floor over to Christine Chiou, Senior Vice President of Investor Relations. Please go ahead.

Christine Chiou: Thank you, Operator. Good morning, good evening, and welcome to Zaii Lab's second quarter 2024 earnings call. Today's call will be led by Dr. Samantha Du, Zai Lab's Founder, CEO, and Chairperson. She will be joined by Josh Smiley, President and Chief Operating Officer, Dr. Rafael Amado, President and Head of Global Research and Development, and Dr. Yajing Chen, Chief Financial Officer. Jonathan Wang, our Chief Business Officer, will also be available to answer questions during the Q&A portion of the call.

Speaker Change: Thank you, Operator. Good morning, good evening, and welcome to Zaii Lab's second quarter 2024 earnings call. Today's call will be led by Dr. Samantha Du, Zaii Lab's Founder, CEO , and Chairperson.

Speaker Change: She will be joined by Josh Smiley, President and Chief Operating Officer, Dr. Rafael Amado, President and Head of Global Research and Development, and Dr. Yajing Chen, Chief Financial Officer.

Speaker Change: Jonathan Wang, our Chief Business Officer, will also be available to answer questions during the Q&A portion of the call.

Christine Chiou: As a reminder, during today's call, we'll be making certain forward-looking statements based on our current expectations. These statements are subject to numerous risks and uncertainties that may cause actual results to differ materially from what we expect due to a variety of factors, including those discussed in our FCC filing. We will also refer to product revenue growth rates on a constant exchange rate basis, which is a non-GAAP financial measure. Please refer to our earnings release filed with the SEC on August 6, 2024, for additional information on this MomGap financial measure. At this time, it is my pleasure to turn the call over to Dr. Samantha Dupont.

Speaker Change: As a reminder, during today's call, we will be making certain forward-looking statements based on our current expectations.

Speaker Change: These statements are subject to numerous risks and uncertainties that may cause actual results differ materially from what we expect due to a variety of factors, including those discussed in our SEC filings.

Speaker Change: We will also refer to product revenue growth rates on a constant exchange rate basis, which is a non-GAAP financial measure.

Samantha Du: Please refer to our earnings release furnished with the SEC on August 6, 2024, for additional information on this NOM GAAP financial measure. At this time, it is my pleasure to turn the call over to Dr. Samantha Du.

Samantha Du: Thank you, Christine, and welcome, everyone. In recent years, Zai Lab has grown significantly. We have built a strong commercial infrastructure, developed a promising portfolio of global and regional assets, and established an exceptional and efficient team across our commercial, R&D, and functional areas. Today, Zai Lab is at a pivotal moment, advancing towards each of our three strategic imperatives, driving top-line growth. Expanding Our Pipeline and Achieving Profitability. In the second quarter, we made great strides in all areas. In the second quarter, night product revenues grew 45% year-over-year, surpassing $100 million for the first time.

Samantha Du: Thank you, Christine, and welcome, everyone.

Samantha Du: In recent years, Zai Lab has grown significantly.

Samantha Du: We have built a strong commercial infrastructure, developed a promising portfolio of global and regional assets.

Speaker Change: and established an exceptional and efficient team across our commercial, R&D and functional areas.

Samantha Du: Today, Zai Lab is at a pivotal moment, advancing towards each of our three strategic imperatives.

Samantha Du: Driving Pipeline Growth, Expanding Our Pipeline, and Achieving Profitability.

Samantha Du: In the second quarter, we made great strides in all areas.

Samantha Du: Our second quarter net product revenues grew 45% year-over-year, surpassing $100 million for the first time.

Josh Smiley: The success of this course launch significantly contributed to this growth, demonstrating our ability to provide innovative solutions that meet a medical need. Safety nets have rapidly become a cornerstone of our current portfolio, and are poised to be a major driver of our near-term growth. We also made significant progress with our pipeline. We received three product approvals and advanced important state regional programs, such as CAR-T for schizophrenia and bimatilsumab for first-line gastric cancer.

Samantha Du: The success of this course launch significantly contributed to this growth, demonstrating our ability to provide innovative solutions that meet and met medical needs.

Samantha Du: GridGuard has rapidly become a cornerstone of our current portfolio and is poised to be a major driver of our near-term growth.

Samantha Du: We receive three product provosts and events in port and lay states regional programs such as Card Steep or Skis of Freenia and Bimla to the map for first-line gastric cancer. We're also expecting data in the coming months from our global pipeline for both our DL3 ADC and CCRA antibody. And we are prepared to advance these programs quickly.

Samantha Du: We also made significant progress with our pipeline

Samantha Du: We received three product approvals and advanced importantly states regional programs such as CARB-C for schizophrenia and b-metilsamide for first-line gastric cancer.

Josh Smiley: We're also expecting data in the coming months from our global partners for both our DL-380C and CCRA undeclared programs, and we are prepared to advance these programs quickly. Additionally, we added a Row 1 ADC to our portfolio, which Rafael will cover in more detail. We are building a strong foundation for our girls well into the next decade. Immersion to Top Line Growth will also focus on Driving Efficiencies and Exercising Financial Prudence, with improved efficiency and a cash position of $730 million.

Samantha Du: We're also expecting data in the coming months from our global pipeline for both our DL3ADC and CCRA antibodies.

Samantha Du: Additionally, we added a role-1 ADC to our portfolio, which Rafael will cover in more detail. We are building a strong foundation for our girls while in to the next decade.

Samantha Du: And we are prepared to advance these programs quickly.

Samantha Du: Additionally, we added a Role 1 ADC to our portfolio.

Rafael: which Rafael will cover in more detail.

Speaker Change: We are building a strong foundation for our girls well into the next decade.

Samantha Du: Inundation to top-line girls will also focus on driving efficiencies and exercising financial prudence, with improved efficiency and a cash position of $730 million. Zai is in an excellent position. We are confident that our strategic initiatives and commitment to excellence will drive our success as we deliver innovative medicine to patients you need and generate significant value for our shareholders.

Speaker Change: In addition to top-line growth, we're also focused on driving efficiencies and exercising financial prudence.

Rafael: with improved efficiency and a cash position of $730 million.

Josh Smiley: Zai is in an excellent position. We are confident that our strategic initiative and commitment to excellence will drive our success, as we deliver innovative medicine to patients in need and generate significant value for our shareholders. I look forward to sharing more progress updates throughout the year. Now, I'll pass the call to Josh.

Rafael: Zai is in an excellent position.

Rafael: We are confident that our strategic initiatives and commitment to excellence will drive our success as we deliver innovative medicine to patients in need and generate significant value for our shareholders.

Samantha Du: I look forward to share more progress updates throughout the year.

Rafael: I look forward to sharing more progress updates throughout the year. Now I'll pass the call to Josh. Josh?

Josh Smiley: Now I'll pass the call to Jiaxi. Thank you, Samantha, and thank you, everyone, for joining the call today. In Q2, our net product revenues grew 45% year-over-year to reach $100.1 million, driven by the successful launch of VivGuard in uptake of our portfolio. Starting with VivGuard, the launch is progressing exceptionally well across all aspects. First, the demand for VivGuard is strong. Nearly 3,300 new patients were treated in the second quarter, bringing the total number of new patients treated to 6,000 in the first half of this year. While it's so early in the launch, we're excited to see a growing percentage of patients returning for second and third treatment cycles.

Josh Smiley: Thank you, Samantha, and thank you everyone for joining the call today. In Q2, our net product revenues grew 45% year over year to reach $100.1 million. Driven by the successful launch of VivGuard and uptake of our portfolio. Starting with Vivgard, the launch is progressing exceptionally well across all assets. Firstly, the demand for VIVGARD is strong. Nearly 3,300 new patients were treated in the second quarter, bringing the total number of new patients treated to 6,000 in the first half of this year.

Josh: Thank you, Samantha, and thank you everyone for joining the call today. In Q2, our net product revenues grew 45% year-over-year to reach $100.1 million, driven by the successful launch of VivGuard and uptake of our portfolio.

Josh: Starting with VivGuard, the launch is progressing exceptionally well across all aspects.

Josh: First, the demand for VIVGARD is strong. Nearly 3,300 new patients were treated in the second quarter, bringing the total number of new patients treated to 6,000 in the first half of this year.

Josh Smiley: While it's still early in the launch, we're excited to see a growing percentage of patients returning for second and third treatment cycles. Second, we made great progress with our targeted approach for hospitals. Third, we are seeing increasing adoption from physicians. Nearly 1,500 healthcare professionals have now prescribed VIVGARD, with a third being repeat prescribers. For Optune and GBM, we are focusing on our core markets, prioritizing our top hospitals, which represents the majority of GBM potential in China. Zach Doro as the first pathogen-targeted therapy addressing hospital-acquired and ventilator-associated pneumonia caused by Acinibacter bimani infections.

Josh: While it's still early in the launch, we're excited to see a growing percentage of patients returning for second and third treatment cycles.

Josh Smiley: With over 170,000 patients living with GMG in China, we have a substantial market opportunity in this indication alone. Second, we made great progress with our targeted approach for hospital listing. By the end of the second quarter, we achieved over 70% of our full-year hospital listing goal. Our specialized sales team is well equipped to not only support VivGuard in GMG but also the launch of F-Gartige Mod sub-Q later this year and the expected launch for CIDP in 2025. Third, we are seeing increasing adoption from physicians. Nearly 1,500 healthcare professionals have now prescribed VivGuard, with a third being repeat prescribers.

Josh: With over 170,000 patients living with GMG in China, we have a substantial market opportunity in this indication alone.

Josh: Second, we made great progress with our targeted approach for hospital listing.

Josh: By the end of the second quarter, we achieved over 70% of our full-year hospital listing goal. Our specialized sales team is well-equipped to not only support VivGuard and GMG, but also the launch of F-CartegiaMod SubQ later this year, and the expected launch for CIDP in 2025.

Josh: Third, we are seeing increasing adoption from physicians. Nearly 1,500 healthcare professionals have now prescribed Vivgard, with a third being repeat prescribers.

Josh Smiley: Fought to feedback from physicians and patients, continue to fuel uptake and we are focused on providing these key stakeholders best in class support. The success of VivGuard is a significant milestone and continues to be one of our top commercialization priorities this year.

Josh: Positive feedback from physicians and patients continue to fuel uptake, and we are focused on providing these key stakeholders best-in-class support.

Josh: The success of VivGuard is a significant milestone and continues to be one of our top commercialization priorities this year.

Josh Smiley: Based on Q2 uptake and current trends, we are raising our full-year VivGuard sales guidance to over $80 million for the. Our primary focus will be on expanding access, securing new patient starts, and driving usage in the maintenance setting, which we believe will extend the duration of treatment and sustain the benefits for our patients. Now, looking at other commercial products, for Zijula, we anticipate continued top-line growth in expanding commercial profitability, driven by increasing sales in first-line ovarian cancer and the duration of treatment. Kinlock and New Zyra are expected to continue to benefit from their listings on the NRDL.

Josh: Based on Q2 uptake and current trends, we are raising our full-year Vivgart sales guidance to over $80 million for the year.

Josh: Our primary focus will be on expanding access, securing new patient starts, and driving usage in the maintenance setting, which we believe will extend the duration of treatment and sustain the benefits for our patients.

Josh: Now, looking at other commercial products, for Zajula, we anticipate continued top-line growth and expanding commercial profitability, driven by increasing sales in first-line ovarian cancer and the duration of treatment. Kinloch and NuZyra are expected to continue to benefit from their listings on the NRDL.

Josh Smiley: For opportune in GBM, we are focusing on our core markets, prioritizing our top hospitals, which represents the majority of GBM potential in China. This strategic focus will help us optimize profitability, even as we do anticipate a period of adjustment.

Josh: For Optune and GBM, we are focusing on our core markets, prioritizing our top hospitals which represents the majority of GBM potential in China. This strategic focus will help us optimize profitability, even as we do anticipate a period of adjustment.

Josh Smiley: We are also preparing to launch multiple new approved products and indications over the next few months. Since our last earnings report, we received three product approvals, including on Cairo in Ross-1 positive non-small cell lung cancer, which comprises 2 to 3 percent of the over 700,000 new cases of non-small cell lung cancer per year in China. Zactoro, as the first passage in targeted therapy addressing hospital acquired and ventilator associated pneumonia, caused by a synabacter of amane infections, and lastly the sub-tube formulation of VivGart in GMG, which provides additional dosing flexibility. Each of these opportunities has the potential to offer significant benefits to patients, and we look forward to bringing these products to patients in the fourth quarter of this year.

Josh: We are also preparing to launch multiple new approved products and indications over the next few months.

Josh: Since our last earnings report, we've received three product approvals, including Onciro in ROS1-positive non-small cell lung cancer, which comprises 2-3% of the over 700,000 new cases of non-small cell lung cancer per year in China.

Josh: Zakturo as the first pathogen-targeted therapy addressing hospital-acquired and ventilator-associated pneumonia caused by Acinibacter bovmonary infections, and lastly, the sub-tube formulation of Vivgart and GMG, which provides additional dosing flexibility.

Josh Smiley: And lastly, the sub-Q formulation of Vivgart and GMG, which provides additional dosing flexibility. Each of these opportunities has the potential to offer significant benefits to patients, and we look forward to bringing these products to patients in the fourth quarter of this year. We are optimizing resource allocation to build a stronger and more agile organization. We're also repositioning our commercial teams and prioritizing investments to focus on our highest potential products and indication

Josh: Each of these opportunities has the potential to offer significant benefits to patients and we look forward to bringing these products to patients in the fourth quarter of this year.

Josh Smiley: In the next 12 months, we expect NMPA to approve sub-QF-Cartige Mod in CIDP, and we plan to submit multiple regulatory applications to NMPA, including PIVDAC for cervical cancer and CAR-XT for schizophrenia.

Speaker Change: In the next 12 months, we expect NMPA to approve Sub-Q, EFGAR, TIGIMOD, and CIDP, and we plan to submit multiple regulatory applications to NMPA, including TIBDAQ for cervical cancer and CAR-XT for schizophrenia.

Josh Smiley: As Samantha mentioned, not only are we on track to deliver substantial top-line growth, we are also focused on driving efficient operations and executing financial discipline. We are optimizing resource allocation to build a stronger and more agile organization. We're also repositioning our commercial teams and prioritizing investments to focus on our highest potential products and indications. VivGart is a prime example of this. Through our ongoing efforts, our net loss declined 34 percent year over year, and we are making great progress towards our goal of achieving profitability by the end of 2025. With a cash position of over $730 million, we expect to be able to fund our operations and business development deals through profitability.

Speaker Change: As Samantha mentioned, not only are we on track to deliver substantial top-line growth, we are also focused on driving efficient operations and executing financial discipline.

Samantha Du: We are optimizing resource allocation to build a stronger and more agile organization. We're also repositioning our commercial teams and prioritizing investments to focus on our highest potential products and indications.

Samantha Du: VivGuard is a prime example of this.

Samantha Du: Through our ongoing efforts, our net loss declined 34% year over year, and we are making great progress towards our goal of achieving profitability by the end of 2025.

Josh Smiley: With a cash position of over $730 million, we expect to be able to fund our operations and business development deals through profitability. And with that, I'll pass the call over to Rafael to discuss the great progress within our R&D portfolio.

Samantha Du: With a cash position of over $730 million, we expect to be able to fund our operations and business development deals through profitability.

Josh Smiley: Overall, we are advancing towards achieving each of our three key corporate objectives, which are to drive revenue growth, achieve profitability, and build our global pipeline.

Samantha Du: Overall, we are advancing towards achieving each of our three key corporate objectives, which are to drive revenue growth, achieve profitability, and build our global pipeline. And with that, I'll pass the call over to Rafael to discuss the great progress within our R&D portfolio.

Rafael Amado: And with that, I'll pass the call over to Raphael to discuss the great progress within our R&D portfolio. Thank you, Josh. We continue to make significant progress with our pipeline in the second quarter, leading to multiple new approvals, as Josh highlighted, and advancements across several key programs. Starting with immunology, we received an NDA approval for the subkey genius formulation of a strategic mod for the treatment of generalized macinia gravies or GNG. With both an IV option and a 30 to 90 second subkey genius injection available, patients will benefit from a more personalized and flexible treatment approach.

Rafael: Thank you, Josh. We continue to make significant progress with our pipeline in the second quarter, leading to multiple new approvals, as Josh highlighted, and advancements across several key programs.

Rafael Amado: Starting with immunology, we received NMDA approval for the subcutaneous formulation of the Cartegie mod for the treatment of generalized myasthenia gravis, or GMG. Beyond GMG, a Cartesian map shows great promise for treating various other autoimmune conditions. This disease can severely impact quality of life, and we are urgently working to provide patients with a new effective and safe treatment option. TARIC-C also presents a significant opportunity as a treatment for Alzheimer's disease with psychosis, or ADP for short.

Rafael: Starting with immunology, we received NMPA approval for the subcutaneous formulation of Aspartigimab for the treatment of generalized myasthenia gravis or GMG.

Rafael: With both an IV option and a 30-90 second subcutaneous injection available, patients will benefit from a more personalized and flexible treatment approach.

Rafael Amado: Beyond GMG, F. Cartigemod shows great promise for treating various other autoimmune conditions. In collaboration with our partner, Arjennex, we are committed to exploring new therapeutic applications. In May, China's NMPA accepted our supplemental biologic license application for the subchef formulation of F. Cartigemod in chronic inflammatory, demyelinating polyneuropathy, or CIDP. There is a significant amade need among the estimated 50,000 patients afflicted with CIDP in China. Currently, only a small fraction of these patients achieved premission with available care, and many patients remain symptomatic. This disease can severely impact quality of life, and we are urgently working to provide patients with a new effective and safe treatment option.

Rafael: Beyond GMG, Ascartegia mug shows great promise for treating various other autoimmune conditions.

Rafael: In collaboration with our partner Argenix, we are committed to exploring new therapeutic applications.

Rafael: In May, China's NMPA accepted our Supplemental Biologics License application for the subcute formulation of F-cartigemog in Chronic Inflammatory Demyelinating Polyneuropoxy or CIDP.

Rafael: There is a significant unmet need among the estimated 50,000 patients afflicted with CIDP in China.

Rafael: Currently, only a small fraction of these patients achieve remission with available care, and many patients remain symptomatic. This disease can severely impact quality of life, and we are urgently working to provide patients with a new, effective, and safe treatment option.

Rafael Amado: Later this year, we also plan to join Arjennex in a registration study in Greater China to evaluate the safety and efficacy of F. Cartigemod's subcutaneously administered by pre-fuel syringe in thyroid IVZs. Moving to neuroscience, we expect to complete enrollment in a registration of bridging study for CAR-TX for the treatment of schizophrenia in Greater China. We anticipate top line data by the ANA of 2024, the results of which are expected to support an NDA filing in the first half of 2025. CARXT also presents a significant opportunity as a treatment for Alzheimer's disease with psychosis, or ADP for short.

Speaker Change: Later this year, we also plan to join Argenix in a registrational study in Greater China to evaluate the safety and efficacy of F-Cartichumab subcutaneously administered by prefilled syringe in thyroid IVBs.

Speaker Change: Moving to neuroscience, we expect to complete enrollment in a registrational bridging study for CAR-XP for the treatment of schizophrenia in Greater China.

Speaker Change: We anticipate top-line data by the end of 2024, the results of which are expected to support an NDA filing in the first half of 2025.

Speaker Change: Type C also presents a significant opportunity as a treatment for Alzheimer's disease with psychosis, or ADP for short.

Rafael Amado: In China, approximately 8 million people live with Alzheimer's disease, with about 45% exhibiting psychotic symptoms. Currently, no approved treatments are available for these patients, highlighting a significant medical need. In July, we joined the Phase 3 ADP-2 study in ADP to support the registration of CAR-TX in this indication in China, positioning us well to address this critical gap in care. What also building our internal global pipeline with three programs currently in the clinic, one in immunology and two in oncology? We advance ZL-1102, our IL-17 human body, into global Phase 2 development for the topical treatment of chronic plaque psoriasis, and the study is currently accruing.

Speaker Change: In China, approximately 8 million people live with Alzheimer's disease, with about 45% exhibiting psychotic symptoms. Currently, no approved treatments are available for these patients, highlighting a significant medical need.

Rafael Amado: In July, we joined the Phase 3 ADEPT2 study in ADP to support the registration of CAR XT in this syndication in China, positioning us well to address this critical gap in care. We are also evaluating ripotrexinib as a treatment for patients with enteropositive solid tumors and plan to submit a supplemental NDA to the NMPA in 2025. Next are two more trading field franchises.

Speaker Change: In July , we joined the Phase 3 ADEPT2 study in ADP to support the registration of CAR XT in this syndication in China, positioning us well to address this critical gap in care.

Speaker Change: We're also building our internal global pipeline with three programs currently in the clinic, one in immunology and two in oncology.

Speaker Change: We advanced ZL1102, our IL-17 human body, into global phase 2 development for the topical treatment of chronic plaque psoriasis, and the study is currently accruing.

Rafael Amado: With potentially improved safety and tolerability, this topic of therapeutic may bring the potential of IL-17 targeted treatment to the large-patient population with less severe chronic plaque psoriasis.

Speaker Change: With potentially improved safety and tolerability, this topical therapeutic may bring the potential of IL-17-targeted treatment to the large patient population with less severe chronic blood cirrhosis.

Rafael Amado: Now moving to some of the key program updates in our oncology pipeline. Starting with a Tyro or Repotractinid, as just a Josh mentioned, we received NNPA approval in May for ROS-1 positive non-smokers and lung cancer in both the TKI-9E and TKI-Pretritid settings. We are also evaluating Repotractinid as the treatment for patients with intra-positive solid tumors and plan to submit a supplementary NDA to the NNPA in 2025. During the gastric cancer, we continue to make great progress for the Marjusa Mab in collaboration with. In June, we completed enrollment for the global 42-101 study, which evaluates the Marituzumab in combination with chemotherapy as a first-line treatment for STFR2B positive gastric cancer.

Speaker Change: Now moving to some of the key program updates in our oncology pipeline.

Speaker Change: Starting with Actyro or Ripotrexinib, as Josh mentioned, we received NMPA approval in May for ROS1-positive non-smoked cell lung cancer in both the TKI-naive and TKI-pre-treated settings.

Speaker Change: We are also evaluating ripotrectinib as a treatment for patients with enteropositive solid tumors and plan to submit a supplemental NDA to the NMPA in 2025.

Speaker Change: Turning to gastric cancer, we continue to make great progress for Bemiduzumab in collaboration with Amgen.

Speaker Change: In June , we completed enrollment for the Global 42-101 Study, which evaluates femorituzumab in combination with chemotherapy as a first-line treatment for FGFR2B-positive gastric cancer.

Rafael Amado: Additionally, we are assessing the Marituzumab in combination with chemotherapy and a checkpoint inhibitor in the 42-102 study. The Marituzumab has the potential to become the first target therapy specifically for STFR2B positive gastric cancer.

Speaker Change: Additionally, we are assessing Bemarituzumab in combination with chemotherapy and a checkpoint inhibitor in the Fortitude-102 study. Bemarituzumab has the potential to become the first targeted therapy specifically for FGFR2B positive gastric cancer.

Rafael Amado: Next, our two more treating field franchise. We expect the people told that are read out for the Phase 3 Panoghati study in first-line, locally advanced and creative cancer by the end of this year. We are participating in the study in Greater China. In addition to our late-stage partner programs, we made good progress in our two internal oncology assets in the clinic. Ziyi L1310 is a DLL3-targeted homogenous DR8 ADC designed with high affinity and specificity for DLL3. Ziyi L13 is a validated therapeutic target in the treatment of small cell lung cancer; more than 88% of small cell lung cancer patients overexpressive.

Rafael Amado: We expect the pivotal data readout for the Phase 3 PANOVA3 study in first-line locally advanced pancreatic cancer by the end of this year. In addition to our late-stage partner programs, we made good progress with our two internal oncology assets in the clinic. Depending on the totality of the data, we could potentially see early clinical results by the end of 2024 or early 2025.

Speaker Change: Next, our two more Turing Field Franchise.

Speaker Change: We expect the pivotal data readout for the Phase 3 PANOVA3 study in first-line locally-advanced pancreatic cancer by the end of this year. We are participating in the study in Greater China.

Speaker Change: In addition to our late-stage partner programs, we made good progress in our two internal oncology assets in the clinic.

Speaker Change: ZL1310 is a DLL3-targeted homogeneous DART8 ADC designed with high affinity and specificity for DLL3.

Speaker Change: The LSD is a validated therapeutic target in the treatment of small cell lung cancer. More than 88% of small cell lung cancer patients overexpress it.

Rafael Amado: Ziyi L1310 utilizes a pretty inscribable linker and a novel topoisomer is one inhibitor payload. It has shown promising proclinical data, and enrolment is ongoing in a global Phase 1 study in the United States and China for relapse and refractory small cell lung cancer, following progression on platinum-based therapy. This study will also include patients treated with a combination of our DLL3 ADC and a checkpoint inhibitor. Depending on the totality of the data, we could potentially see early clinical results by the end of 2024 or early 2025. Ziyi L1218 is a CCR8 antibody currently under enrolment in a global Phase 1 study evaluating 1218 as a single agent and in combination with Pembrolizumab in patients with advanced solid tumors.

Speaker Change: ZL1310 utilizes a protease cleavable linker and a novel topoisomerase I inhibitor payload.

Speaker Change: It has shown promising preclinical data and enrollment is ongoing in a global phase 1 study in the United States and China for relapse and refractory small cell lung cancer following progression on platinum-based therapy.

Speaker Change: This study will also include patients treated with a combination of RBLL3-ADC and a checkpoint inhibitor.

Speaker Change: Depending on the totality of the data, we could potentially see early clinical results by the end of 2024 or early 2025.

Speaker Change: DL-1218 is a CCR8 antibody currently under enrollment in a global phase 1 study evaluating DL-1218 as a single agent and in combination with pembrolizumab in patients with advanced solid tumors.

Rafael Amado: We expect to present a preliminary clinical PK and PD analysis of the global Phase 1 study in solid tumors at the European Society of Medical Oncology in September 2024. We're also excited by the possibility of synergistic combination opportunities for Ziyi L1218 with our Portafolio Asset near average. A recent publication in Cell highlights the combination's potential to improve treatment of homologous recombination decisions depositives of variant cancers.

Speaker Change: We expect to present the preliminary clinical PK and PD analysis of the Global Phase I Study in Solid Tumors at the European Society of Medical Oncology in September 2024.

Speaker Change: We're also excited by the possibility of synergistic combination opportunities for ZIL-1218 with our portfolio asset, Nero Alvarez.

Speaker Change: A recent publication in Cell highlights the combination's potential to improve treatment of homologous recombination deficiency-positive ovarian cancers.

Rafael Amado: Our efforts in drug discovery are moving at a bridge phase, and we're also progressing other internally discovered product candidates. We continue to execute on our global development objectives of generating at least one global INB per year. We recently have expanded our global ontology pipeline with a next generation ROR-1 ADC program in term ZL6301. ROR-1 is an attractive target with the potential to be used in the treatment of solid tumors, whether it is commonly expressed and with validation in hematological. We believe the linker payload technology embodied in ZL6301 will overcome the limitations of earlier ROR1 targeted ADC, even as a potential best in class and first in class targeting of expressing solid tumors.

Speaker Change: RF-14 drug discovery are moving at a brisk pace, and we are also progressing other internally discovered product candidates.

Speaker Change: We continue to execute on our global development objective of generating at least one global IND per year. We recently have expanded our global oncology pipeline with a next generation ROR1 ADC program termed ZL6301.

Speaker Change: ROR1 is an attractive target with the potential to be used in the treatment of solid tumors where it is commonly expressed and with validation in hematological malignancies.

Rafael Amado: This ADC program demonstrates our continuous focus on our global solid tumor portfolio, and we will leverage our strong capabilities to develop this as quickly as possible.

Speaker Change: This ADC program demonstrates our continuous focus on our global solid tumor portfolio, and we will leverage our strong capabilities to develop this as quickly as possible.

Rafael Amado: Overall, we achieved plenty of progress across R&D in the first half of this year. We can expect this fast momentum to continue. I look forward to providing updates at our next earnings call.

Speaker Change: Overall, we achieved plenty of progress across R&D in the first half of this year, and we can expect this fast momentum to continue.

Yajing Chen: And now, Yajing will give us an overview of financial results. Yajing. Thank you, Rafael. Now, I will discuss our second quarter of 2024 financial results compared to the prior year period. Total net-partar revenues for the second quarter of 2024 were $100.1 million compared to $68.9 million for the same period in 2023, representing year-over-year growth of 45%, or 47% on a constant currency basis. This growth was primarily driven by increased sales for regard since its launch in September 2023, and another listing in January 2024, and increased sales for the July and the New Zealand era.

Speaker Change: I look forward to providing updates at our next earnings call. And now, Yajing will give us an overview of our financial results. Yajing.

Yajing: Thank you, Rafael. Now I will discuss our second quarter 2024 financial results compared to the prior year period.

Yajing: Total net product revenues for the second quarter of 2024 were $100.1 million.

Yajing: compared to $68.9 million for the same period in 2023, representing year-over-year growth of 45% or 47% on a constant currency basis.

Yajing: This growth was primarily driven by increased sales for Vivigar since its launch in September 2023 and an RDO listing in January 2024, and increased sales for Zidula and Imidazira.

Yajing Chen: Primary drivers of this year-over-year revenue growth included the following. The July net-partar revenues increased 5% to $45 million. Driven by increased sales in first-line operating cancer, and increased duration of treatment. Supported by renewal of the July's unadial listing for the maintenance treatment of adult patients with first-line and recurrent operating cancer, effective January 1, 2024. With regard net-partar revenues grew to $23.2 million compared to $0.1 million for the same period in 2023. Driven by unadial listing for the IV formulation for the treatment of GMG, effective January 1, 2024, and positive physician and patient reception as well as increased patient access as regard is added to hospital formularies.

Yajing: Primary drivers of this year-over-year revenue growth included the following.

Yajing: The EULA Net Product Revenues increased 5% to $45 million, driven by increased hospital sales in first-line ovarian cancer and increased duration of treatment.

Yajing: Supported by renewal of the Juulus NRDL listing for the maintenance treatment of adult patients with first-line and recurrent ovarian cancer, effective January 1, 2024.

Yajing: Vivigard Net Product Revenues grew to $23.2 million compared to $0.1 million for the same period in 2023.

Yajing: by NRBL listing for the IV formulation for the treatment of GMG effective January 1st, 2024.

Yajing: and positive physician and patient reception, as well as increased patient access as VISGARD is added to hospital formularies.

Yajing Chen: New Zealand net-partar revenues grew 165% to $12.3 million.

Yajing: New Zaira Net Product Revenues grew 165% to $12.3 million.

Yajing Chen: Driven by the unadial listing for the IV formulation for the treatment of adults with community acquired bacterial pneumonia, or CADP, and acute bacterial skin and skin structure infection, or F-C, in the first quarter of 2023, and at the all-of-fumulation for this indication in the first quarter of 2024.

Jonathan Wang: driven by the NLDL listings for the IV formulation for the treatment of adults with community-acquired bacterial pneumonia, or CADP, and acute bacterial skin and skin structure infection, or FC, in the first quarter of 2023, and the oral formulation for this indication in the first quarter of 2024. And we expect this trend to continue as a result of growing revenues and ongoing cost and efficiency initiatives.

Yajing: Driven by the NLDL listings for the IV formulation for the treatment of adults with community-acquired bacterial pneumonia, or CADP.

Yajing: and Acute Bacterial Skin and Skin Structure Infection, or FC, in the first quarter of 2023, and the oral formulation for this indication in the first quarter of 2024.

Yajing Chen: Turning now to our expenses. Research and developing expenses were $61.6 million in the second quarter of 2024, compared to $76.7 million for the same period in 2023. This decrease was primarily due to decreased milestone fees for our license and collaboration agreements. Partially, offset by increased clinical trial expenses related to newly initiated studies and the progress of existing studies. Sailing general and administrative expenses were $79.7 million in the second quarter of 2024, compared to $67.9 million for the same period in 2023. This increase was primarily driven by higher general selling expenses and headcount growth, primarily to support Vizagart.

Speaker Change: Turning now to our expenses.

Speaker Change: Research and development expenses were $61.6 million in the second quarter of 2024, compared to $76.7 million for the same period in 2023.

Speaker Change: This decrease was primarily due to decreased milestone fees for our license and collaboration agreements.

Speaker Change: Partially offset by increased clinical trial expenses related to newly initiated studies and the progress of existing studies.

Speaker Change: Selling general and administrative expenses was $79.7 million in the second quarter of 2024, compared to $67.9 million for the same period in 2023.

Yajing Chen: Both R&B and SG&A expenses significantly declined as a percentage of revenues in the second quarter of 2024, compared to the same period in 2023. And weeks back, this trend to continue as a result of growing revenues and ongoing pass and inefficiency initiatives.

Speaker Change: And we expect this trend to continue as a result of growing revenues and ongoing cost and efficiency initiatives.

Yajing Chen: Zai Lab reported a net loss of $80.3 million in the second quarter of 2024, or a loss per ordinary share attributable to commercial holders of $0.08, compared to a net loss of $120.9 million for the same period in 2023, or a loss per ordinary share of $0.13. We are in a strong financial position and in the quarter with cash position of $730 million, compared to $750.8 million as of March 31, 2024.

Speaker Change: Zai Lab reported a net loss of $80.3 million in the second quarter of 2024, or a loss per ordinary share attributable to common shareholders of $0.08.

Speaker Change: compared to a net loss of $120.9 million for the same period in 2023, or a loss per ordinary share of $0.13.

Speaker Change: We are in a strong financial position, ending the quarter with cash position of $730 million compared to $750.8 million as of March 31, 2024.

Yajing Chen: Based on our operating plan and our anticipated revenue growth, we expect to be able to fund our business through profitability, which we expect to achieve by the end of 2020.

Speaker Change: Based on our operating plan and our anticipated revenue growth, we expect to be able to fund our business through profitability, which we expect to achieve by the end of 2025.

Operator: And with that, I would now like to turn the call back over to the operator to open up lines for questions.

Operator: Operator. We would now like to open the lines for questions. If you have a question, please press star 11 at any time. And wait for your name to be announced. With your question, please press star 11 again. List and bow will compile the Q&A roster. These will take a few moments.

Speaker Change: and many more. Thank you. Thank you.

Speaker Change: We would now like to open the lines for questions. If you have a question please press star 1 1 at any time and wait for a name to be announced. Withdrawal question please press star 1 1 again. Please stand by while we compile the Q&A roster. This will take a few moments.

Michael Yee: And now we're going to take your first question. And the question comes from the line of Kyle Young from Jeffries. The line is open. Please ask your question.

Speaker Change: And now we're going to take our first question.

Speaker Change: And the question comes from the line of Kyle Young from Jeffries. The line is open, please ask your question.

Michael Yee: Hey, it's Michael Yee for Kyle Young. We have two questions. First question is related to Vivgart. Obviously, maybe just talk a little bit about the trajectory month over month ads. How are things going across the country, and tell us a little bit more about the metrics that you're tracking as it relates to what gives you confidence in your guidance.

Michael Yee: Hey, it's Michael Yee for Kyle Yang. We have two questions. First question is related to Vivgard. Obviously, maybe just talk a little bit about the trajectory, month-over-month ads. How are things going?

Josh Smiley: And second question, maybe a little bit different. I appreciate the new in licensing deal for the world one. Can you just talk a little bit about business development? Are you particularly keenly focused on oncology? Would you go to other areas such as metabolic and obesity? I know you have neurology. Kind of a little bit to put out everywhere, but are you considering things beyond just oncology? Thank you.

Speaker Change: And second question may be a little bit different. I appreciate the new in-licensing deal for the ROR-1. Can you just talk a little bit about business development? Are you particularly keenly focused on oncology? Would you go to other areas such as...

Speaker Change: Metabolic and obesity, I know you have neurology, so kind of a little bit spread out everywhere, but are you considering things beyond just oncology? Thank you.

Josh Smiley: Good morning, Michael. It's Josh. Thanks for the questions.

Josh Smiley: I'll start on Div Gart and then ask Jonathan to talk a little bit about business development strategy. I think first on Div Gart, we're, you know, quite pleased with the performance through the first three quarters of launch, you know, going back to last year, but certainly the first half of this year. What gives us the confidence to say will, you know, we certainly see the trend exceeding $80 million for the year. First, I think, you know, as you know, what we've been focused on in the early parts of launch is getting physicians' experience using the product with their patients in GMG, and we've focused on those patients who are in, you know, an acute episode or not responding well to current treatment.

Josh: Good morning, Michael. It's Josh. Thanks for the questions. I'll start on DivGart and then ask Jonathan to talk a little bit about business development strategy. I think first on DivGart, we're quite pleased with the performance through the

Josh: First three quarters of launch, you know, going back to last year, but certainly the first half of this year.

Speaker Change: It's what gives us the confidence to say we'll...

Jonathan: We certainly see the trend exceeding $80 million for the year. First, I think, as you know, what we've been focused on in the early parts of launch is getting physicians experience using the product with their patients in GMG. And we've focused on

Jonathan: Those patients who are in an acute episode or not responding well to current treatment.

Josh Smiley: And I think that's gone really well. We're seeing about 1,000 new patients a month, and that's been consistent through the first half of the year. And I don't think we see any reason for that to start to slow down. You know, keep in mind that we see about 150,000 patients who are on label in China with GMG who will benefit, and, you know, so far I think we've treated somewhere in the range of about 7,000. So we've still got a long way to go. But I think with the, you know, the initial emphasis on patients who aren't doing well, what we're seeing is physicians are getting really good experience.

Jonathan: start to slow down. Keep in mind that we see about 150,000 patients who are on label.

Jonathan: in China with GMG who will benefit. And, you know, so far I think we've treated somewhere in the range of about 7,000. So we've still got a long way to go. But I think with the initial emphasis on patients who aren't doing well, what we're seeing is physicians are getting really good experience. We've had over 1,500 physicians prescribed.

Josh Smiley: We've had over 1,500 physicians prescribe so far. And of those physicians, you know, a third of those are, I think, using it in pretty significant quantities now with their patients. I've used for a second, third. And, you know, I think we have a pretty good percentage of physicians who've used it, you know, ten or more times. So I think as we look now to the second half of the year, we'll continue to focus on accruing new patients to the state. We're just scratching the surface, I think, in terms of the patients who can benefit from this important therapy.

Jonathan: So far, of those physicians, a third of those are, I think, using it in pretty significant quantities now with their patients. I've used it for a second, third, and I think we have a

Jonathan: a pretty good percentage of physicians who have used it 10 or more times. So I think as we look now to the second half of the year, we'll continue to focus on accruing new patients. As I say, we're just scratching the surface, I think, in terms of the patients who can benefit from this important therapy. But we will begin to look at ensuring that we're transitioning from just an acute sort of initial experience to ensuring patients are getting the full benefits from the maintenance aspects of the drug. So I think, you know, we're still early in the launch, Michael, but I think as we get into the second half of the year here, we will be focused on continuing to accrue patients, but also on ensuring they're getting back in for their second, third cycle.

Josh Smiley: But we will begin to look at ensuring that we're transitioning from just an acute, you know, sort of initial experience to ensuring patients are getting the full benefits from the maintenance aspects of the drug. So I think, you know, we're still early in the launch, Michael, but I think as we get into the second half of the year here, we will be focused on continuing to accrue patients, but also on ensuring they're getting back in for their second, third cycles, and so on. And it's no reason to believe that that won't be, you know, a successful transition over time here.

Speaker Change: and so on, and no reason to believe that that won't be a successful transition over time here. So, more to come, but again, I think based on where we are right now, we're confident that we'll be over $80 million for the year, but still, as we think into 2025 and beyond, I think just a really huge opportunity, I think, here for GMG patients in China. I'll turn it over to Jonathan to talk about business development.

Josh Smiley: So more to come. But again, I think based on where we are right now, we're confident that we'll be over $80 million for the year. But still, you know, as we think into 25 and beyond, I think just a really huge opportunity.

Jonathan Wang: I think here for GMG patients in China, I'll turn it over to Jonathan to talk about business development.

Jonathan Wang: Hey, Mike. Thanks for the question. So I think the raw one is really a continuation of our strategy to grow the global pipeline. And in terms of our focus, you know, as we grow that global pipeline, it's primarily oncology and immunology programs. And even within that, you know, we have certain areas that we're more focusing on. So, for example, ADC is an area that we are growing, you know, early stages as well as late stage product pipeline. When we turn sort of more regional assets, which we are also very keenly looking at to, you know, build on the operational synergies there.

Jonathan: Hey Mike, thanks for the question. So I think the Royal One is really a continuation of our strategy to grow the global pipeline.

Jonathan: And in terms of our focus, you know, as we grow that global pipeline, it's primarily oncology and immunology programs.

Jonathan: And even within that, you know, we have certain areas that we're more focusing on.

Jonathan: So for example, ADC is an area that we are growing.

Jonathan: You know, early stage as well as late stage product pipeline.

Jonathan: When we turn sort of more regional assets, which we are also very keenly looking at to, you know, build on the operational synergies there.

Jonathan Wang: In that area, we can probably go a bit beyond oncology and immunology, like what we have done with Karek's tea, for example, when we see a product in a pipeline kind of opportunity that's big enough. Then certainly we want to leverage our capabilities, you know, in China and Asia in this part of the world. You know, I think we have demonstrated capabilities across modalities across diseases. And certainly, globally, we are much more focused within oncology and immunology.

Jonathan: In that area, we can probably go a bit beyond oncology and immunology, like what we have done with CAR-XT, for example, when we see a product in a pipeline kind of opportunity that's big enough.

Jonathan: Then certainly we want to leverage our capabilities in China, in Asia, in this part of the world. I think we have demonstrated capabilities across modalities, across diseases, but certainly globally we are much more focused within oncology and immunology.

Jonathan Wang: Thanks, Jonathan.

Operator: Thanks, Jonathan. Operator, next question. Thank you. And now we're going to take our next question.

Operator: Operator, next question. Thank you. The participants, if you wish to ask a question, please press star 11 on your telephone keypad.

Speaker Change: Thanks, Jonathan. Operator, next question.

Operator: Dear participants, if you wish to ask a question, please press star 11 on your telephone keypad. To ensure everyone has the opportunity to ask a question today, please limit yourself to just two questions. And the question comes from the line of Anupam Rama from J.P. Morgan. Your line is open. Please ask your question.

Speaker Change: Thank you.

Speaker Change: Dear participants, if you wish to ask a question, please press star 11 on your telephone keypad. To ensure everyone has the opportunity to ask a question today, please limit yourself just to two questions.

Anupam Rama: To ensure everyone has the opportunity to ask a question today, please give me just two questions. And now we're going to take over the next question. And the question comes from the line of Anupam Rama from JP Morgan. Your line is open; please ask a question. Hey guys, thanks so much for taking the question, and congrats on the progress. So what's up to this card now approved? How do you think about the dynamics of incorporating this modality into the marketplace and the near term? And what is kind of like a post NRDL world look like for for for sub queue?

Speaker Change: And now we're going to take our next question.

Speaker Change: And the question comes from the line of Anupam Rama from JP Morgan. Your line is open. Please ask your question.

Anupam Rama: Hey guys, thanks so much for taking the question and congrats on the progress.

Anupam Rama: So, with Sub-Q VISCAR now approved, how do you think about the dynamics of incorporating this modality into the marketplace in the near term, and what does kind of like a post-NRDL world look like for Sub-Q? I'm assuming NRDL is coming next Jan, but given the approval came in July , would we have to wait for...

Anupam Rama: I'm assuming NRDL is coming next Jan, but given the approval came in July, we have to wait for 2026 NRDL for sub queue this card. Maybe you could walk us through that timeline as well. Thanks so much.

Speaker Change: 2026 NRDL for subcubic card. Maybe you could walk us through that timeline as well. Thanks so much.

Josh Smiley: Thanks, Anupam; it's Josh. Yeah, we're excited about the approval for sub queue. Yeah, so just, you know, going back, of course, now ID is approved and on NRDL. And that's what we're focused on. We'll look to launch sub queue later this year. And it won't be covered by NRDL this year. I think given the timing of the approval, which was post June 30th, it's unlikely that we'll be able to add this product to NRDL for 2025. You know, it's an important addition to the franchise. It improves the patient experience versus IV in terms of time.

Speaker Change: Thanks, Anupam, it's Josh. Yeah, we're excited about the approval for SubQ. Yeah, so just, you know, going back, of course, now IV is approved and on NRDL, and that's what we're focused on. We'll look to launch SubQ later this year, and it won't be covered by NRDL this year. I think given the timing of the approval, which was

Speaker Change: Post June 30th, it's unlikely that we'll be able to add this product to NRDL for 2025.

Speaker Change: It's an important addition to the franchise. It improves the patient experience versus IV in terms of time, as Rafael mentioned on the call. So, we'll work to make sure that the product's available for physicians and patients, but I think for now, the base assumption is that that'll be available through NRDL in 2026, not 2025. I don't see that as a major impediment to continuing to drive the kind of patient uptake and maintenance that I talked about in the last answer. You know, today, patients do go to the hospital for treatment,

Josh Smiley: As Rafael mentioned on the call. So, you know, we'll work to make sure that the products available for physicians and patients. But I think for now, the base assumption is that that will be available through NRDL in 2026, not 2025. I don't see that as a major impediment to continuing to drive the kind of patient uptake and maintenance that I talked about in the last answer. Today, patients do go to the hospital for treatment, for follow-up, and of course, sub queue. While a better experience, a faster experience still requires physician administration. So, we're focused on getting that, you know, to NRDL as quickly as possible, but I think it's likely a 2026, not 2025, opportunity.

Speaker Change: or follow-up, and of course, SubQ while a better experience, a faster experience.

Speaker Change: still requires physician administration, so we're focused on getting that, you know, to NRDL as quickly as possible, but I think it's likely.

Samantha Du: But then, of course, we look to combine that with CIDP approval and launch, and that will be our next big indication. But we still have, you know, a great opportunity in front of us with GMG. And as I say, I think the IV formulation works really well and fits the treatment paradigm for China today.

Speaker Change: a 2026, not 2025 opportunity. But then, of course, we'll look to combine that with CIDP approval and launch, and that'll be our next.

Samantha Du: Thank you, everyone.

Samantha Du: Yeah, I think, Hi, this is Samantha. I think Josh gave a very good, you know, overall perspective. But one thing I want to add is, even though we won't be, we're unlikely to be included in NRDL in general. However, for the sub queue, we will continue to work with the municipal and provincial reimbursement plans, which we have done that before. For example, our obtune is the second most supported by municipal and provincial insurance plans, second only to are cut through the Thank you, Samantha.

Speaker Change: Yeah, I think, hi, this is Samantha. I think Josh gave a very good, you know, overall perspective.

Speaker Change: But one thing I want to add is, even though we won't be, we're very unlikely to be included in the NRDL in January , however, for the subcute, we will continue to

Speaker Change: to work with the municipal and provincial reimbursement plans.

Operator: Very good.

Operator: Next question. Yes, of course.

Speaker Change: Yeah, thank you, Samantha. Very good. Next question.

Operator: Just give me a moment.

Samantha Du: Yes, of course.

Operator: Now we're going to take our next question, and it comes to the line of Yigal Nochomovitz from Citigroup Your Line, is the open piece after question. Hi, great. Thanks very much. So back in the second quarter of 23, you outlined the profitability guidance by the end of 2025 and 50 percent year-on-year top line Kager.

Speaker Change: Give me a moment.

Speaker Change: Now we're going to take our next question and it comes from the line of Yigal Nochomovitz from Citigroup. Your line is open, please ask your question.

Yigal Nochomovitz: So, back in the second quarter of 23, you outlined the profitability guidance by the end of 2025 and the 50% year-on-year top-line CAGR. It would be really helpful if you could just take a moment and walk us through the key drivers on the P&L more concretely to get to that profitability target by the end of 2025 and discuss the growth assumptions and what contribution you'd expect from Sub-Q Vivgard as well as CIDP and potentially any contribution from these new launches of ZEC-0 and ZYRO that are coming at the end of the year.

Yigal Nochomovitz: It would be really helpful if you could just take a moment and walk us through the key drivers on the P&L, more concretely to get to that profitability target by the end of 2025 and discuss the growth assumptions and what contribution you'd expect from some sub-tubive guard as well as CDI, CDIP, and potentially any contribution from these new launches of Zero and Tyro that are coming at the end of the year. Thanks.

Yigal Nochomovitz: Thanks, Yigal.

Josh Smiley: It's Josh again. I'll start, but then last, Yajing, to maybe provide a few more comments on the P&L. But I think the biggest driver here for profitability, you know, for the full year of 26 and achieving that, you know, toward the end of 25, is the top line growth, as you're suggesting through your question. You know, we've said we expect a compound annual growth of 50 percent or greater between the end of 2023 and the end of 2025, and that, you know, that's starting with the launch of that Cartigimod this year. And, you know, you're seeing us start to approach that number even in the second quarter, and, you know, the more that Cartigimod contributes to the total revenue base, the higher the sales growth is going to be.

Yigal Nochomovitz: Thanks.

Yigal Nochomovitz: Thanks, Yigal. It's Josh again. I'll start, but then we'll ask Yajing to maybe provide a few more comments on the P&L.

Speaker Change: I think the biggest driver here for profitability, you know, for the full year of 26 and achieving that, you know, toward the end of 25 is the top-line growth, as you're suggesting through your question. You know, we've said we expect compound annual growth of 50% or greater between...

Speaker Change: The end of 2023 and the end of 2025 and that, you know, that's starting with the launch of that Cartesian mod this year. And, you know, you're seeing us start to approach that number even in the second quarter. And, you know, the more that.

Josh Smiley: So I think the biggest thing to watch is over the next, you know, eight to 12 quarters, is, you know, is the top line growing at 50, you know, at or around 50 percent. And I think if that's the case, then the rest of the P&L, you know, sort of falls into place. To your question about what's the, you know, what's the composition or contribution there? Again, I think the biggest driver between now and the end of 2025 and in the 2026 is going to be Vivgard, IVGMG. I think that will be the biggest driver of growth just given where we are now in the timeline we have between, you know, everyone that we are.

Josh Smiley: We don't expect any other FCRNs to be on NRGL and available over that, you know, over that time period, certainly, and through 2025. So we've got, you know, a really good open field in front of us here and tremendous patient opportunities. We will, as mentioned, we'll launch three new products or product forms later this year. That includes Zach Doro and in repo. You know, expect launches for those products that at the end of Q4 will pursue NRGL; you know, listing over time. And I do expect that they will contribute growth, of course, to the franchise, to the overall franchise.

Speaker Change: Tremendous patient opportunities. We will, as mentioned, we'll launch three new products or product forms later this year that includes Zach Doro.

Speaker Change: and Repo. Expect launches for those products at the end of Q4. We'll pursue NRDL listing over time, and I do expect that they will contribute growth, of course, to the franchise.

Josh Smiley: I think if you look at our base business, so you know, as a dual look and lock, New Zyra and Optune, you know, it's said for this year you should expect cumulatively those products together to grow, you know, similar to last year, so that's in and around 20% range. And I think, you know, for the next year or two, you know, we should expect those products to continue to grow and do approach, you know, something like that, probably not exactly, you know, 20%. But I think if you take the base business continuing to grow through 2026, add on significant growth from GMG, we'll layer in CIDP next year, also with the sub-Q, and then the new products that are coming.

Speaker Change: to the overall franchise. I think if you look at our base business, so, you know, Zajula, Kinloch,

Speaker Change: year or two you know we should expect that those products to continue to grow and to approach you know something like that, probably not exactly you know 20% but I think if you take the base business continuing to grow through 2026 add-on significant growth from

Speaker Change: GMG. We'll layer in CIDP next year also with the sub-Q.

Josh Smiley: I think that's, you know, that gives us a lot of confidence that there's a 50% plus percent top line potential there.

Speaker Change: And then the new products that are coming, I think that's, you know, that gives us a lot of confidence that there's a 50 plus percent top line potential there. Most of the infrastructure to support those products are already in place, so I think, you know, we should be able to manage our expense base pretty well, but I'll ask Yajing to make any final comments here.

Yajing Chen: Most of the infrastructure to support those products is already in place, so I think, you know, we should be able to manage our expense base pretty well, but I'll ask Yajing to make any final comments.

Yajing Chen: Thank you, Jiajun. Thank you very much for the question. I think that we're happy to see, right? We're kind of happy to see the perspective of the revenue growth. So as we grow the revenue at 50%, we are putting the operating expenses in the sort of an incontrol, meaning that we want to be as efficient as we can. As we communicated before, our DNA expenses are going to be fly-ish in the next two years. So we are the building infrastructure. You're not going to expect to see the growth there. Our R&D expenditures will also remain relatively stable in the next couple of years, as we're running down the current studies and then ramping up some of the global studies.

Yajing: Yeah, I'm online now. Thank you very much for the question. I think we're happy to see, right, we're kind of happy to see the perspective of revenue growth. So as we grow the revenue at 50%, we are putting the operating expenses

Yajing Chen: The area that you're going to expect modest growth is the sales and marketing. As Josh mentioned, there are a new list of new launches in the next couple of years. We are going to grow the commercial S&M when your model is way much, much smaller than the revenue growth. So all you're going to see is the expensive as a percentage of revenues will continue to go down significantly year over year. We have demonstrated that in the prior three years, and we're going to continue that trend in the next couple of years.

Unknown Attendee: The area that you're going to expect modest growth in is sales and marketing, as Josh mentioned, a new list of new launches in the next couple of years. We are going to grow the commercial SMM in a modest way, much, much smaller than revenue growth. So overall, you're going to see the expenses as a percentage of revenue will continue to go down significantly year over year, and we have demonstrated that in the prior three years, and we're going to continue that trend in the next couple of years. That's the path to get to profitability by the end of 2025.

Yajing: So, overall, you're going to see the expenses as a percentage of revenue.

Yajing: will continue to go down significantly year over year. And we have demonstrated that in the prior three years, and we're going to continue that trend in the next couple of years. That's the path to get to the profitability by the end of 2025.

Yajing Chen: That's how we, that's the path to get to the profitability by the end of 2025.

Yajing Chen: Thank you.

Yigal Nochomovitz: Thank you very much. That was great. Just one follow-up.

Unknown Attendee: One follow-up question. I'm assuming that CarXT and Vema are going to launch, I would think, in 2026. Is that a fair assumption? And once those are launched, and then you have those two plus Vivgard plus the original four products, is there the potential to provide some sort of longer-term guidance for the entire commercial portfolio so investors can get a sense of the trajectory as we move into the second half of the decade?

Josh Smiley: I'm assuming that CARXT and BEMMA are going to launch, I would think, in 2026. Is that a fair assumption? And once those are launched, and then you have those two plus fifth-guard plus the original four products, is there the potential that provides some sort of longer term guidance for the entire commercial portfolio? So investors can get a sense of the trajectory as we move into the second half of the decade? Yeah, far just to confirm, I think both of those products should be contributing revenue in 2026, the exact timing of approvals end of 25, early 26, or whatever, obviously contingent on getting the trials complete and submitted and otherwise.

Speaker Change: I just want one follow-up on, um, I'm assuming that CarxG and Brema are...

Speaker Change: Is there the potential to provide some sort of longer-term guidance for the entire commercial portfolio so investors can get a sense of the trajectory as we move into the second half of the decade?

Jonathan Wang: Yeah, first, just to confirm, I think both of those products should be contributing revenue in 2026. The exact timing of approvals, you know, end of 25, early 26 or whatever, you know, obviously contingent on getting the trials complete and submitted and otherwise, but certainly in 2026, we'd expect both of those products to be on the market. And yeah, I think at that point, as you know, Yigal, we gave guidance, you know, the first time.

Speaker Change: Thank you all.

Josh Smiley: But certainly in 2026, we'd expect both of those products to be on the market. And yeah, I think at that point, as you know, we gave guidance. You know, the first guidance that we gave was last year and said that, you know, between, as I say, the end of 23 and the end of 28, we expect sales growth to be at least 50% on a compound annual basis. I think as we get those products on the market and have a few years of history behind us with the first wave of launches, of course, we will be in a position to give a little bit more longer-term guidance.

Speaker Change: that we gave was last year and said that between, as I say, the end of 23 and end of 28, we expect sales growth to be.

Speaker Change: at least 50% on a compound annual basis. I think as we get those products on the market and have a few years of history behind us with the first wave of launches.

Josh Smiley: But I think the thing that is important to keep in mind is the products that will drive 50% plus sales growth between now and the end of 2028 are all still going to be in the growth phase of their launch trajectories. And, you know, if we can get to that kind of growth in 2028, there's no reason that it shouldn't continue at very high rates as we get to the end of the decade and early into the 2030s. I mean, of course, you know, products like Habima and CARXT, you know, by 2028 will still be early in their, you know, in their launch trajectory and we'll be adding indications to VivGuard like thyroid eye disease and otherwise.

Speaker Change: Of course, we'll be in a position to give a little bit more longer-term guidance, but I think the thing that is important to keep in mind is

Speaker Change: The products that will drive 50% plus sales growth between now and the end of 2028 are all still going to be in the growth phase of their launch trajectories.

Josh Smiley: So I think we're, you know, we're quite optimistic about the long-term growth potential of the portfolio.

Josh Smiley: And, you know, we just need to take them, you know, one launch at a time. But so far, so good, and we're quite excited.

Josh Smiley: Thank you.

Operator: Thank you so much.

Sarah Enderoz: Now, we'll go take over next question.

Speaker Change: Thank you.

Sarah Enderoz: And the question comes from the line of Louise Chen from Canton, Zulan. Is the open piece after question. Hi, this is Sarah Enderoz on the Louise Chen from Canter. Congratulations on the progress of the squirter. We have two questions. One kind of a follow-up to the previous question that we just talked about, which is the car XT and the Bama. As we're getting closer to the registration stage, how should we think about these two assets in terms of the contribution to the overall top and bottom line.

Speaker Change: And the question comes from the line of Louise Chen from Cantor. Your line is open. Please ask your question.

Josh Smiley: And then maybe kind of a different question is the latest status on the DLL3 ADC. And what kind of data should we expect later this year. Thank you.

Josh Smiley: Great. Thanks, Sarah. First on car XT and Bama, yes, I think as we've talked, we do expect those to be contributing to the company in 2026 for sure, just to confirm sort of timelines with car XT. We should complete the bridging study this quarter and look to submit that data by the end of the year, early next year. So that puts us well online for a timeline for a 2026 approval and launch with Bama. We're in two first line studies. Fortitude 101 and Fortitude 102, as Raphael mentioned. 101, the enrollment is complete and we should be in a position to, you know, release those results in conjunction with our partner AM Gen sometime in early 2025 and submit.

Speaker Change: Great. Thanks, Sarah. First, on CARXT and BEMA, yes, I think as we've talked, we do expect those to be contributing to the company in 2026 for sure. Just to confirm sort of timelines with CARXT, we are

Speaker Change: Approval and launch with BEMA. We're in two first-line studies, Fortitude 101 and Fortitude 102, as Rafael mentioned.

Josh Smiley: So I think certainly for the first line, a doublet study. So this is Bama with chemo. That approval should certainly hit, you know, sometime in early 2026. The Fortitude 102 is enrolling, and I think it's about six months or so behind. So again, I think both of those, hopefully contributing in 2026. I think overall if you look at the opportunity for car XT in schizophrenia, you know, we've said in the past, there's eight million patients diagnosed with schizophrenia in China. Car XT represents a really important advancement. You know, at first, you know, certain new mechanisms that will be approved on a global basis in, you know, but more than 30 years, I think.

Speaker Change: That, you know, that approval should certainly hit, you know, sometime in, you know, early 2026. The Fortitude 102 is enrolling, and I think it's about six months or so behind. So, again, I think both of those hopefully are

Josh Smiley: And I think a lot of interest and receptivity among thought leaders in China to get this product available for their patients. So I think there's, you know, no reason this shouldn't be a, you know, very significant opportunity, you know, a billion dollar type of annual opportunity over time in China.

Josh Smiley: We're also joining the Alzheimer's psychosis trial. And of course, that's a big opportunity as well on a longer-term basis. I think for Bama, if you look at gastric cancer in Asia, of course, and in China specifically, it's, you know, a very significant cancer. We're focused on patients who overexpress FGFR. And I think that's a, you know, more, you know, sort of if you look at the greater than 10% expression, that's, you know, approaching 100,000 patients a year. This is a first line therapy that, you know, if we can replicate what we've seen in earlier, smaller studies, patients should be benefiting from this drug for quite a long time.

Speaker Change: Alzheimer's psychosis trial and of course that's a big opportunity as well on the longer term basis. I think for BEMA, if you look at gastric cancer in Asia, of course, and in China specifically.

Speaker Change: FTFR. And I think that's a, you know, more, you know, sort of, if you look at the greater than 10% expression, that's, you know, approaching 100,000 patients a year. This is a first line therapy that, you know, if we can replicate what we've seen in earlier smaller studies, a patient should be benefiting from this drug for quite a long time. So a period of time in terms of survival. So I think, again, this one, we've also said,

Josh Smiley: So a period of time in terms of survival. So I think, again, this one we've also said could contribute, you know, up to a billion dollars in annual sales per year in the first line setting. Again, we've got to get the trials completed and approved. But both of these products, I think, are quite significant and will represent major advances for patient care in China. So I think that's where we are there.

Josh Smiley: In DLL3, in terms of data, we've said we'd expect data from the dose escalation phase of the Phase One trial to be available and discussed at a medical meeting by the end of this year or early next year. And hopefully, we have, you know, we have something to report there in Q4 where we're quite excited about the progress we're seeing with this asset. And of course, it's an important target, and we think we've got a really good, good drug care. So thanks for the question.

Speaker Change: So, I think that's where we are there. In DLL-3, in terms of data, we've said we'd expect data from the dose escalation phase of the Phase 1 trial.

Speaker Change: to be available and discussed at a medical meeting by the end of this year or early next year. And hopefully we have, you know, we have something to report there in in Q4. We're quite excited about the progress we're seeing with this asset and of course it's an important target and we think we've got a really good good drug here. So thanks for the questions.

Jonathan Chang: Thank you so much. Now we're going to take our next question. And the question comes to the line of Jonathan Chang from the Irink Partners.

Speaker Change: Now we're going to take our next question.

Jonathan Chang: Your line is open piece after question. Hi guys, thanks for taking my questions. On BIMA or Tuzumab, can you discuss how enrollment in the Phase 3-4 to 2 studies has progressed versus the plan? And what are your latest thoughts on FGFR2B expression levels and the level of overlap with other markers like PDO1? Thank you.

Speaker Change: And the question comes from the line of Jonathan Chang from Lear Inc. Partners. Your line is open, please ask your question.

Jonathan Chang: Hi guys, thanks for taking my questions.

Jonathan Chang: Thanks, Jonathan.

Rafael Amado: Thanks, Jonathan. I'll start here, and John from our team may have some comments as well, but I think, first and foremost, in terms of enrollment, we've been quite pleased with the ability to enroll here. We've contributed significant numbers of patients to both Fortitude 101 and 102, just given the prevalence of gastric cancer in China and our, I think, very good clinical execution and relationships with key sites. So, as I mentioned, enrollment is complete for 101, and we'll transition to completing the assessment and working towards a submission in conjunction with ANGEN on a global basis, hopefully early next year.

Josh Smiley: I'll start here, and John from our team may have some comments as well. But I think first in terms of enrollment, we've been quite pleased with the ability to enroll here. We've contributed significant amounts of patients to both Fortitude 101 and 102 just given the prevalence of gastric cancer in China and are, I think, very good clinical execution and relationships with key sites. So, as I mentioned, enrollment is complete in 101, and we'll transition to completing the assessment and working towards a submission in conjunction with Ann Jen on a behind, but the enrollment is going really well.

Speaker Change: gastric cancer in China and our I think very good clinical execution and relationships with with key sites so

Speaker Change: As I mentioned, enrollment is complete in 101, and we'll transition to completing the assessment and working towards a submission.

Speaker Change: in conjunction with Ann Jen on a global basis, hopefully early next year. 102, as I say, is about six months behind, but enrollment's going really well. So I think both of these, you know, you should expect both of these studies to be, you know, fundamentally complete in 2020.

Rafael Amado: 102, as I say, is about six months behind, but enrollment's going really well. So, I think both of these, you know, you should expect both of these studies to be, you know, fundamentally complete in 2025, with hopefully, you know, good top-line data available. And I think as we look at the opportunity, as I mentioned, I think if you look at the expression greater than 10 percent, it's, you know, somewhere in the range of 75 to 100,000 patients in China.

Josh Smiley: So I think both of these, you know, you should expect both of these studies to be fundamentally complete in 2025, with hopefully good top line data available. And I think as we look at the opportunity, as I mentioned, I think if you look at the expression greater than 10 percent, it's somewhere in the range of 75 to 100,000 patients in China. I think, you know, with Jonathan can comment here too because he's very close to this, but I think with, you know, relatively limited overlap, I think, with some of the other targeted agents in this case.

Speaker Change: And I think as we look at as we look at the opportunity, as I mentioned, you know, I think if you look at the expression greater than 10%, it's you know, somewhere in the range of, you know, 75 to 100,000 patients in China. I think, you know, with

Rafael Amado: I think, you know, with, and Jonathan can comment here, too, because he's very close to this, but I think with relatively limited overlap with some of the other targeted agents in this case. But, of course, our focus here is, I think, the bigger opportunity long-term is in the triplet study, so in combination with the PD.

Jonathan: Jonathan can comment here, too, because he's very close to this, but I think with, you know, relatively...

Jonathan Wang: But of course, our focus here is, I think, the bigger opportunity long term is in the triplet study. So in combination with the PDO1 in the first line setting. So we're quite, you know, quite excited about that opportunity, Jonathan.

Jonathan Wang: I don't know if you have anything to add. Yeah, sure. Maybe just quick comments to add to, you know, Josh's remarks. I think, first, you know, China contributes more than, you know, 50 percent of the majority of the gastric patients around the world. So since Zai joined the BMS studies, which is Zai joined much later than global, we contributed, you know, more patients in China than any other country in the world and a very significant percentage of the global enrollment; thereby we are accelerating the global timeline of Beemer to China and to other markets. On the expression levels, you know, when we did the initial Fortitude one, four, four study, the phase two study, whether the high expressions or the low medium expressions was actually much more than what we expected before we started the phase two studies.

Jonathan Wang: Yeah, sure. Maybe just a few quick comments to add to Josh's remarks.

Jonathan Wang: I think first, China contributes more than 50% of the majority of gastric patients around the world. So since Zai joined the BEMA studies, which he joined much later than Global, we have contributed more patients in China than any other country in the world and a very significant percentage of the global enrollment. Therefore, we are accelerating the global timeline of BEMA to China and to other markets. On the expression levels, you know, when we did the initial Fortitude 144 study, the Phase 2 study, whether the high expressions or the low-medium expressions were actually much more than what we expected before we started the Phase 2 study.

Jonathan: So, since Zai joined the BEMA studies, which Zai joined much later, you know,

Jonathan: Global, we contributed, you know, more patients in China than any other country in the world and a very significant percentage of the global enrollment. Thereby, we are accelerating the global timeline of Beamer to China and to other markets.

Jonathan Wang: So FGFR2B is about 32 percent, and of which high expression patients is about 18 percent of the overall patient population. So it is a very large patient group, and the more higher expression we also found with FGFR2B, the more aggressive the tumour type. So therefore, Beemer, you know, showing much wider separation, you know, of the PFS and OS curves in the original Fortitude One, Four, Four study. And we also saw there's an additive effect with agents like PD-1, and mind you, PD-1 and gastric cancer. The response ray is in the teens, you know, so it works, but, you know, there's probably a lot more room for improvement.

Jonathan: So FGFR-2B is about 32% and of which high expression patients is about 18% of the overall patient population.

Jonathan: So it is a very large patient group and we also found with FGFR2B, the more aggressive the tumor type.

Jonathan: of the PFS and the OS curves in the original Fortitude 144 study.

Jonathan: And we also saw there's additive effect with agents like PD-1, and mind you, PD-1 in gastric cancer, the response rate is in the teens, you know, so it works, but, you know, there's probably a lot more room for improvement.

Jonathan Wang: So look, we're very excited about Beemer. We think there's a lot of potential, you know, to be transformative for these medicines, and we're looking forward to the data, which we are accelerating at the moment together with ANGEN. Thank you.

Operator: Thank you. Now we're going to take our next question, and the question comes from the line of Jack Lin from Morgan Stanley. Your line is open. Please ask your question.

Jack Lin: Now we're going to take our next question. And the question comes from the line of Jack Lin from Morgan Stanley. Your line is open. Please ask your question. Hi, thank you. Can you hear me? Yes.

Jonathan: Thank you.

Speaker Change: Thank you. Now we're going to take our next question.

Jack Lin: Thanks for thinking my question, and congrats on the stellar performance quarter. So my question is on the subcutaneous regard. I understood the topic was touched upon earlier, or particularly detailed on the NRD out timing. But I was wondering if the company could expand on the kind of commercial strategy, such as pricing, to drive kind of adoption, particularly given that potential competition. Renato Leczimab was also accepted by the CDE for review and could potentially be approved later this year, which is also a subcutaneous FCR. So I also want to know if you can manage to help share thoughts, kind of comparing this card with the two drugs.

Speaker Change: Yes.

Speaker Change: Thanks for taking my question and congrats on the stellar performance this quarter.

Speaker Change: So my question is on the subcutaneous zircar. I kind of understood the topic was touched upon earlier, with particular detail on the NRDL timing.

Speaker Change: But I was wondering if company could expand on the kind of the commercial strategy, such as pricing to drive adoption.

Speaker Change: Particularly given the potential competition, the Renazo lexizumab was also accepted by the CDE for review and could potentially be approved later this year, which is also a sub-tube based FCR.

Josh Smiley: And also how does the UCB's trying to commercial operation compare to us, especially in the neuro-immunology space? Thank you.

Josh Smiley: Thanks, Jack.

Josh Smiley: Thanks, Jack. It's Josh.

Josh Smiley: It's Josh. I'll start. I think first, as I mentioned, and Samantha mentioned as well, we'll do everything we can to make subcutaneous a viable alternative and option for patients who have supplemental insurance or other ways of accessing it. But for now, the emphasis on the IV formulation works well, as I say. It fits very well into patient treatment patterns and how patients seek treatment for GMG in China. I think that the differentiation among the agents is really going to be around how does it improve the symptoms and manage the symptoms of GMG much more than the convenience or formulation piece.

Speaker Change: Thanks, Jack. It's Josh. I'll start.

Speaker Change: Thank you.

Speaker Change: You know, I think as I mentioned, and Samantha mentioned as well, we'll do everything we can to make SubQ a viable alternative and option for patients who have, you know, supplemental insurance or, you know, other ways of accessing it. But for now, the emphasis on the IV formulation works well, as I say, it fits

Josh Smiley: I'll start. First, you know, I think, as I mentioned, and Samantha mentioned as well, we'll do everything we can to make SubQ a viable alternative and option for patients who have, you know, supplemental insurance or, you know, other ways of accessing it. But for now, the emphasis on the IV formulation works well, as I say, it fits very well into patient treatment patterns and how, you know, patients seek treatment for GMG in China.

Josh Smiley: So I think we're quite confident that the data that we have, that Argenics has accumulated and we are now accumulating in the real world setting in China, is going to give us a, I think, a really strong position even as other agents are potentially approved and on the market. Of course, anything that's approved in the next number of months is not going to be eligible for NRDL listing until 2026. And again, I think by that point, the data that we've generated both in clinical trials, but also now in a real-world setting with what will be tens of thousands of patients' experience, I think will put us in a really strong position.

Josh Smiley: I think that the differentiation among the agents is really going to be around how it improves the symptoms and manages the symptoms of GMG much more than the convenience or formulation piece. So I think we're quite confident that the data that we have, that Argenyx has accumulated, and that we are now accumulating in a real world setting in China is going to give us a really strong position, even as other agents are potentially approved and on the market.

Josh Smiley: Of course, anything that's approved in, you know, the next number of months is not going to be eligible for NRDL listing until, you know, 2026. And again, I think by that point, the data that we've generated, both in clinical trials but also now in a real world setting with, you know, what will be tens of thousands of patients experience, I think, puts us in a really strong position. So we're not, I think, overly concerned about the next approvals or the next generation of agents.

Josh Smiley: So we're not, I think, overly concerned about the next approvals or the next generation of agents. Of course, in any setting like this, having been involved in many launches over many years, having more competitors is both a challenge from a competitive perspective, but also an opportunity, particularly in new classes, where you have more good and high-quality organizations talking to physicians and educating them and educating patients. So I think from that standpoint, we welcome some of the, you know, the bigger companies with, you know, quality products. But I think on an individual basis, we think our data stands up, you know, really well and will be, will be in a strong position for many years.

Josh Smiley: Of course, you know, in any setting like this, having been involved in many launches over many years, having, you know, more competitors is both a challenge from a competitive perspective but also an opportunity, particularly in new classes where you have more, you know, good and high-quality organizations talking to physicians and educating them and educating patients. So I think from that standpoint, we welcome some of the bigger companies with, you know, quality products. But I think on an individual basis, we think our data stands up, you know, really well and will be in a strong position for many years.

Speaker Change: the bigger companies with quality products, but I think on an individual basis, we think our data stands up really well and will be in a strong position for many years to come.

Operator: Thank you.

Linhai Zhao: Now we're going to take the question, and it comes from learn of Linhai Zhao from Goldman Sachs. Your learn is open piece after question. Thanks for taking my question. I'm curious about the overall commercial strategy for opting going forward, especially given that I know that for GBM, we are now adopting a more focused commercial strategy to the top tier oncology companies, well we could find more concentrated GBM patients. Just curious about the would we adopt similar concentrated strategy for other indications? For example, we have larger indications in non-small settlement cancer and potentially the pancreatic cancers which may be less concentrated compared to GBM.

Operator: Now we're going to take the question, and it comes from Linhai Zhao from Goldman Sachs. Your line is open. Please ask a question.

Speaker Change: Now we're going to take the questions and it comes from Linhai Zhao from Goldman Sachs, your line is open, please ask your question.

Josh Smiley: Then, for the other indications, would you still consider adopting this concentrated commercial strategy for opting? And overall, how do you see the profitability of the program level for opting? Thanks. Thanks for the question.

Unknown Attendee: Thanks.

Josh Smiley: It's Josh. I'll take a shot at this one. I think first, yeah, it relates to GBM where we have enough experience now to understand where the best opportunities are from an economic perspective, and we have made some adjustments in the second quarter that will allow us to drive profitability through this indication. And I think the limiting factors here, of course, are reimbursement. Until or unless something changes in terms of NRDL eligibility for medical devices, I think we're always going to have to be focused on where it makes sense to deploy our resources and how to do that in a way that drives not just sales but also bottom line profits.

Speaker Change: Thanks for the question. It's Josh. I'll take a shot at this one. I think first, yeah, as it relates to GBM, we're, you know, we have enough experience now to understand, you know, where the best opportunities are from an economic perspective, and we have made some adjustments in the second quarter.

Speaker Change: to drive profitability through this indication. And I think, you know, the limiting factors here, of course, are reimbursement.

Speaker Change: Until or unless something changes in terms of NRDL eligibility for medical devices, I think we're always going to have to be focused on where it makes sense to deploy our resources and how to do that in a way that drives not just sales but also bottom line.

Josh Smiley: And you'll see that that's the focus we've initiated for Q2 and beyond for GBM. I think, as it relates to the next opportunity in lunar and in non-small cell lung cancer, we will take the same approach. And we're going to look, and I mean this is a product that, if approved, I think provides a really important treatment option in second line lung cancer in China. I think there's good interest in having this product available. We'll look and make sure that as we deploy our resources against it that we're going to put it against the opportunities where we can drive benefits for physicians and patients, but also benefits for shareholders.

Speaker Change: And you'll see that that's the focus we've initiated for Q2 and beyond for the

Speaker Change: Non-small cell lung cancer. We will take the same approach. I mean, we're going to look, and I mean, this is a product that, if approved, I think, provides a really important treatment option in second-line lung cancer in China, and I think there's...

Josh Smiley: So I think we'll, because of the supplemental insurance focus here, necessarily we'll focus on areas where patients can get it and stay on the drug or stay on the technology and so on. But it's a much bigger opportunity. I think in the number of patients who could benefit from TT fields in second line lung cancer is pretty significant. I think we're quite excited and anxious to see the results from the Penova trial at the end of this year in pancreatic. I think, as you've indicated, that's maybe, maybe not as concentrated an opportunity, but to have something that could work in pancreatic cancer and provide benefits, I think, is pretty significant.

Speaker Change: But it's a much bigger opportunity, I think,

Speaker Change: T.T. Fields and second line lung cancer is pretty significant. I think we're, you know, quite excited and anxious to see the results from the PANOVA trial at the end of this year in pancreatic. I think, you know, as you've...

Speaker Change: indicated, you know, that's maybe a, maybe not as concentrated an opportunity but the, but the...

Josh Smiley: So I think that's an opportunity that, as the data is available and if it looks good, I think there's a compelling opportunity there, and we'll make sure we sort of optimize the launch there. But I think summary overall is really important technology. We do have to take a focused approach here because of the reimbursement opportunity, but if it continues to show benefits and in multiple tumors, there's a lot to work. with you. Thanks for the question.

Speaker Change: I think that's an opportunity that as the data is available and if it if it looks good I think there's a compelling opportunity there and we'll make sure we you know sort of optimize the launch there But I think summary overall is

Speaker Change: really important technology. We do have to take a focused approach here because of the reimbursement opportunity, but if it continues to show benefits in multiple tumors, there's a lot to work with here.

Josh Smiley: Thanks, and that's very helpful. Thank you.

Speaker Change: Thanks for the question.

Samantha Du: I'm showing the further questions at this time. I will now turn the call back over to Zai Lab CEO Samantadu for closing remarks. Thank you, operator. I want to thank everyone for taking the time to join us on a call today.

Samantha Du: I'm showing no further questions at this time. I will now turn the call back over to Zai Lab CEO, Samantha Du, for closing remarks. Thank you, operator. We appreciate your support and look forward to updating you again after the third quarter of 2024. Operator, you may now disconnect this call.

Speaker Change: 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 third quarter of 2024.

Samantha Du: We appreciate your support and look forward to updating you again after the third quarter of 2024.

Operator: Operator, you may now disconnect this call. This concludes today's conference call.

Operator: Thank you for participating in my old disconnect.