Q2 2026 Zai Lab Ltd Earnings Call

August 6, 2026

Operator: Hello, ladies and gentlemen. Thank you for standing by. Welcome to Zai Lab's Q2 2026 Financial Results Conference Call. At this time, all participants are in listen-only mode. Later, we'll conduct a question and answer session.

Operator: 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, Head of Investor Relations. Please go ahead, ma'am.

Christine Chiou: Thank you, operator. Hello. Welcome, everyone. Today's earnings call will be led by Dr. Samantha Du, Zai Lab's Founder, CEO, and Chairperson. She will be joined by Dr. Rafael Amado, President, Head of Global Research and Development, and Dr. Yajing Chen, Chief Financial Officer. Dr. Shan He, our Chief Business Officer, and Dr. Yizhe Wang, our Operating Partner, 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 filings. We will also refer to adjusted loss from operations, which is a non-GAAP financial measure.

Speaker #2: operator. Hello, and welcome, everyone. Today's earnings call will be led by Dr. Samantha Du, Zai Lab's founder, CEO, and chairperson. She will be joined by Dr. Rafael Amado, President and Head of Global Research and Development, and Dr. Yajing Chen, Chief Financial Business Officer, and Dr. Yu Zhiwang, our Operating Partner, will also be available to answer questions during the Q&A portion of the call.

Christine Chiou: Dr. Shan He, our Chief Business Officer, and Dr. Yizhe Wang, our Operating Partner, 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.

Christine Chiou: 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 filings. We will also refer to adjusted loss from operations, which is a non-GAAP financial measure.

Speaker #2: materially from what we expect due to a variety may cause actual results to differ discussed in our SEC filings. We will also refer to adjusted loss from operations, which is a non-GAAP financial measure.

Christine Chiou: Please refer to our earnings release furnished with the SEC on 6 August 2026 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.

Speaker #2: non-GAAP financial measure. At this time, it is my pleasure to turn the call over to Dr. Samantha Du.

Samantha Du: Thanks, Christine. Good morning. Good evening, everyone. Thank you for joining us today. Zai Lab has reached an important inflection point in its evolution from a regional business into a global biopharmaceutical company. We built this company by bringing first or best-in-class medicines to patients in China. Today, we are developing our own innovative medicines for patients worldwide, with our first US regulatory submission expected next year. The transformation reflects the R&D capabilities we have built. We're conducting global multiple-center registrational oncology trials, advancing additional clinical programs across oncology and immunology. Advancing our preclinical pipeline into INDs this year. zoci, our potential first-in-class DLL3 ADC, demonstrates what Zai Lab is capable of. We advanced it from IND to global pivotal trials in less than two years, reflecting the speed and efficiency of the integrated development organization we have built.

Speaker #3: Thanks, Christine. Good morning, and good evening, everyone. Thank you for joining us today. Zai Lab has reached the important inflection point in its evolution from original business into a global biopharmaceutical company.

Speaker #3: We built this company by bringing first a best-in-class medicine to patients in China. Today, we are developing our own innovative medicines for patients worldwide, with our first U.S.

Speaker #3: regulatory submission expected next year. The transformation reflects the R&D capabilities we have built. We're conducting global multiple-center registrational oncology trials, advancing additional clinical programs across oncology and immunology, and advancing our preclinical pipeline into I&Ds this year.

Speaker #3: Josey, our potential first and best-in-class DL380C, demonstrates what Zai Lab is capable of. We advance it from I&D to global pivotal trials, in less than 2 years, reflecting the speed and efficiency of the integrated development organization we have built.

Samantha Du: By the end of this year, we expect to have three registrational programs in small cell lung cancer and neuroendocrine carcinoma. We're also evaluating zoci in combination with T-cell engagers through collaborations with Amgen and Boehringer Ingelheim. Our second major global opportunity is ZL-1503, a potential first-in-class, long-acting IL-13/IL-31 bispecific for atopic dermatitis. We believe it has the potential to bring together multiple attributes in a single asset, robust skin clearance, rapid and durable itch reduction, and longer dosing interval. Later this year, we'll report the program's first human data. At the same time, we continue to strengthen our commercial business. This quarter, we sharpened our focus behind our highest priority brands. Net product revenue grew 11% versus the previous quarter, and the business remained commercially profitable.

Speaker #3: By the end of this year, we expect to have 3 registrational programs in small cell lung cancer, a neuroendocrine carcinoma, but also evaluating Josey in combination with T-cell engagers through collaborations with Amgen and Boehringer Ingelheim.

Speaker #3: Our second major global opportunity is GL1503, a potential first-in-class lung agent outstarting L31 bispecific. For atopic dermatitis, we believe it has the potential to bring together multiple attributes in a single asset: robust skin clearance, rapid and durable age reduction, and longer dosing interval.

Speaker #3: Later this year, we'll report the program's first human data at the same time we continue to strengthen our commercial quarter, we sharpened our focus behind our highest priority brands: night product revenue grew 11% versus previous quarter, and the business remained commercially profitable.

Samantha Du: We're setting a strong foundation and expect a return to meaningful year-on-year growth in 2027, followed by the potential for our first US product launch in 2028. Zai Lab's evolution into a global biopharmaceutical company is well underway. With a growing portfolio of globally developed, differentiated medicines and a profitable commercial business, we're confident in the path ahead and the long-term value we can create for shareholders and patients. With that, let me turn the call over to Rafael to further discuss our pipeline in greater detail. Thank you.

Speaker #3: We're setting a strong foundation and expect a return to meaningful year-on-year growth in 2027. Followed by the potential for our first U.S. product launch in 2028.

Speaker #3: Zai Lab's evolution into a global biopharmaceutical company is well underway. With a growing portfolio of globally developed differentiated medicines and a profitable commercial business, we're confident in the path ahead, and the long-term value we can create for shareholders and patients.

Speaker #3: With that, let me turn the call over to Rafael. To further discuss our pipeline in greater detail, thank you.

Rafael G. Amado: Thank you, Samantha. Let me walk you through the pipeline and what to expect this year. Starting with zoci, our DLL3-targeted ADC. Small cell lung cancer is one of the most difficult diseases in oncology, and zoci has demonstrated what we believe is a potential best-in-class ADC profile. In patients who have failed frontline multiple lines of treatments, we're seeing strong responses, including high responses and control of brain metastases. That efficacy, with a favorable safety profile, positions zoci as a backbone for future combination regimens across lines of therapy. This program is moving fast. A global registration phase III in second-line plus small cell lung cancer is expected to complete enrollment in H1 2027, with a US accelerated approval submission expected to follow later that year, and approval anticipated in 2028.

Rafael Amado: Thank you, Samantha. Let me walk you through the pipeline and what to expect this year. Starting with zoci, our DLL3-targeted ADC. Small cell lung cancer is one of the most difficult diseases in oncology, and zoci has demonstrated what we believe is a potential best-in-class ADC profile. In patients who have failed frontline multiple lines of treatments, we're seeing strong responses, including high responses and control of brain metastases. That efficacy, with a favorable safety profile, positions zoci as a backbone for future combination regimens across lines of therapy. This program is moving fast. A global registration phase III in second-line plus small cell lung cancer is expected to complete enrollment in H1 2027, with a US accelerated approval submission expected to follow later that year, and approval anticipated in 2028.

Speaker #4: Thank you, Samantha. Let me walk you through the pipeline and what to expect this year. Starting with Josey, our GLL3-targeted ADC. Small cell lung cancer is one of the most difficult diseases in oncology, and Josey has demonstrated what we believe is a potential best-in-class ADC profile.

Speaker #4: In patients who have failed frontline multiple lines of treatment, we're seeing strong responses, including high responses and control of rare metastases. That efficacy, with a favorable safety profile, positions Josey as a backbone for future combination regimens across lines of therapy.

Speaker #4: This program is moving fast. Our global registration phase 3 in second-line plus small cell lung cancer is expected to complete enrollment in the first half of 2027, with a U.S.

Speaker #4: accelerated approval submission expected to follow later that year and approval anticipated in 2028. Aresmo, in October, we will present combination data evaluating Josey plus PD-L1 with or without chemo in first-line small cell lung cancer or during maintenance.

Rafael G. Amado: At ESMO in October, we will present combination data evaluating zoci plus PD-L1 with or without chemo in first-line small cell lung cancer or during maintenance. Today's standard of care of IO plus chemo delivers a 60% to 70% response rate, median PFS of about five months, and Grade 3 or higher treatment-related adverse events around 60%. NCCN guidelines recommend four cycles of platinum-based chemotherapy. A chemo-sparing regimen could offer better tolerability, allow longer treatment duration compared to systemic chemotherapy, and improve control of brain metastases. This is the basis of our phase III combination strategy with immunotherapy, which we have discussed with regulators. We anticipate initiating the trial in the coming months.

Rafael Amado: At ESMO in October, we will present combination data evaluating zoci plus PD-L1 with or without chemo in first-line small cell lung cancer or during maintenance. Today's standard of care of IO plus chemo delivers a 60% to 70% response rate, median PFS of about five months, and Grade 3 or higher treatment-related adverse events around 60%. NCCN guidelines recommend four cycles of platinum-based chemotherapy. A chemo-sparing regimen could offer better tolerability, allow longer treatment duration compared to systemic chemotherapy, and improve control of brain metastases. This is the basis of our phase III combination strategy with immunotherapy, which we have discussed with regulators. We anticipate initiating the trial in the coming months.

Speaker #4: Today, standard of care of IO plus chemo delivers a 60% to 70% response rate, median PFS of about 5 months, and grade 3 or higher treatment-related adverse events around 60%.

Speaker #4: NCCN guidelines recommend 4 cycles of platinum-based chemotherapy. A chemo-sparing regimen could offer better tolerability, allow longer treatment duration compared to systemic chemotherapy, and improve control of rare metastases.

Speaker #4: This is the basis of our phase 3 combination strategy with immunotherapy, which we have discussed with regulators. We anticipate initiating the trial in the coming months.

Speaker #4: And in extrapulmonary neuroendocrine carcinomas, where there is no established standard of care in the second-line and beyond, Josey demonstrated a confirmed ORR of 38.2%, which is well above the roughly 18% seen with currently used regimens.

Rafael G. Amado: In extra-pulmonary neuroendocrine carcinomas, where there is no established standard of care in the second line and beyond, zoci demonstrated a confirmed ORR of 38.2%, which is well above the roughly 18% seen with currently used regimens. We're engaging with regulators on a potential approval pathway using extended single-arm data from our ongoing second-line trial, with a subsequent approval pathway in first line. Three registrational programs underway by year-end. We're also collaborating with Amgen and Boehringer Ingelheim to combine zoci with T-cell engagers. A global phase I-B study with Amgen is already enrolling, including a cohort of untreated small cell lung cancer patients on a triple combination of zoci, Imdelltra, and IMFINZI. The global phase I-B/II study with Boehringer Ingelheim in neuroendocrine carcinoma is expected to initiate in the coming months. Beyond zoci, our next wave of global assets is advancing quickly.

Rafael Amado: In extra-pulmonary neuroendocrine carcinomas, where there is no established standard of care in the second line and beyond, zoci demonstrated a confirmed ORR of 38.2%, which is well above the roughly 18% seen with currently used regimens. We're engaging with regulators on a potential approval pathway using extended single-arm data from our ongoing second-line trial, with a subsequent approval pathway in first line. Three registrational programs underway by year-end. We're also collaborating with Amgen and Boehringer Ingelheim to combine zoci with T-cell engagers. A global phase I-B study with Amgen is already enrolling, including a cohort of untreated small cell lung cancer patients on a triple combination of zoci, Imdelltra, and IMFINZI. The global phase I-B/II study with Boehringer Ingelheim in neuroendocrine carcinoma is expected to initiate in the coming months. Beyond zoci, our next wave of global assets is advancing quickly.

Speaker #4: We're engaging with regulators on a potential approval pathway using extended single-arm data from our ongoing second-line trial with a subsequent approval pathway in first-line.

Speaker #4: So, 3 registrational programs underway by year-end. We're also collaborating with Amgen and Boehringer Ingelheim to combine Josey with T-cell engagers. Our global phase 1B study with Amgen is already enrolling, including a cohort of untreated small cell lung cancer patients on a triple combination of Josey, Imdeltra, and Imfinzy.

Speaker #4: And the global phase 1B2 study with Boehringer Ingelheim in neuroendocrine carcinoma is expected to initiate in the coming months. Beyond Josey, our next wave of global assets is advancing quickly.

Rafael G. Amado: ZL-1503 is a long-acting humanized IgG1 bispecific antibody targeting both interleukin-13 and interleukin-31 receptor alpha. It includes YTE amino acid modifications in the Fc region that extend serum half-life and support less frequent dosing. Through blocking both pathways at once, ZL-1503 is designed to break the itch scratch inflammation cycle with rapid, durable efficacy and less frequent dosing in moderate to severe atopic dermatitis. ZL-1503 is in the clinic now with first-in-human data in healthy volunteers to be presented in H2 of this year. This data set will include pharmacokinetic data following single-dose administration and pharmacodynamic data, including inhibition of AD-related biomarkers such as p-STAT6, TARC, and CCL26, a cytokine that recruits eosinophils during type 2 inflammation. We will also have an initial read on safety and immunogenicity, including assessment of anti-drug antibodies.

Rafael Amado: ZL-1503 is a long-acting humanized IgG1 bispecific antibody targeting both interleukin-13 and interleukin-31 receptor alpha. It includes YTE amino acid modifications in the Fc region that extend serum half-life and support less frequent dosing. Through blocking both pathways at once, ZL-1503 is designed to break the itch scratch inflammation cycle with rapid, durable efficacy and less frequent dosing in moderate to severe atopic dermatitis. ZL-1503 is in the clinic now with first-in-human data in healthy volunteers to be presented in H2 of this year. This data set will include pharmacokinetic data following single-dose administration and pharmacodynamic data, including inhibition of AD-related biomarkers such as p-STAT6, TARC, and CCL26, a cytokine that recruits eosinophils during type 2 inflammation. We will also have an initial read on safety and immunogenicity, including assessment of anti-drug antibodies.

Speaker #4: GL1503 is a long-acting humanized IgG1 both interleukin-13 and interleukin-31 receptor alpha. It includes YTE amino acid modifications in the ST region that extend serum half-life and support less frequent dosing.

Speaker #4: Through blocking both pathways at once, GL1503 is designed to break the itch-scratch inflammation cycle with rapid, durable efficacy and less frequent dosing in moderate to severe atopic dermatitis.

Speaker #4: GL1503 is in the clinic now with first-in-human data and healthy volunteers to be presented in the second half of this year. This dataset will include pharmacokinetic data, following single-dose administration, and pharmacodynamic data, including inhibition of AD-related biomarkers such as PSTAT6, TARC, and CCL26, a cytokine that recruits eosinophils during type 2 inflammation.

Speaker #4: We will also have an initial read on safety and immunogenicity, including assessment of antidrug antibodies. We're also currently enrolling patients with AD in the multiple ascending dose portion of the trial, and we will share this data at a major medical conference next year.

Rafael G. Amado: We're also currently enrolling patients with AD in the multiple ascending dose portion of the trial. We will share this data at a major medical conference next year. We believe ZL-1503, with a potentially differentiated profile, can address unmet medical needs in one of the largest markets in immunology globally. We are moving this program forward rapidly. Beyond its lead syndication, ZL-1503 has the potential to expand into additional IL-13 and IL-31-mediated diseases, creating a broader development opportunity over time. We look forward to sharing updates as the program advances. I would highlight just two more programs. ZL-6201, our internally discovered LRRC15 targeting ADC. We are actively enrolling patients in the global phase I study and expect to complete enrollment in the dose escalation portion with initial data expected in H1 of next year.

Rafael Amado: We're also currently enrolling patients with AD in the multiple ascending dose portion of the trial. We will share this data at a major medical conference next year. We believe ZL-1503, with a potentially differentiated profile, can address unmet medical needs in one of the largest markets in immunology globally. We are moving this program forward rapidly. Beyond its lead syndication, ZL-1503 has the potential to expand into additional IL-13 and IL-31-mediated diseases, creating a broader development opportunity over time. We look forward to sharing updates as the program advances. I would highlight just two more programs. ZL-6201, our internally discovered LRRC15 targeting ADC. We are actively enrolling patients in the global phase I study and expect to complete enrollment in the dose escalation portion with initial data expected in H1 of next year.

Speaker #4: We believe GL1503 with a potentially differentiated profile can address a met medical needs in one of the largest markets in immunology globally, and we are moving this program forward rapidly.

Speaker #4: Beyond its lead syndication, GL1503 has the potential to expand into additional IL-13 and IL-31-mediated diseases, creating a broader development opportunity over time. We look forward to sharing updates as the program advances.

Speaker #4: I would highlight just 2 more programs. GL6201, our internally discovered LRRC15 targeting ADC. We are actively enrolling patients in the global phase 1 study and expect to complete enrollment in the dose escalation portion with initial data expected in the first half of next year.

Rafael G. Amado: By year-end, we expect to submit an IND for ZL-1311, a next-generation T-cell engager targeting MUC17, a promising target for gastrointestinal cancers. In summary, we have the infrastructure and capacity to advance multiple global programs at different stages of development simultaneously at speed and efficiency and across geographies, while also advancing a regional pipeline. We have significant data emerging throughout the year on our most advanced products. I look forward to sharing it with you in the coming months. With that, I'll hand it over to Yajing.

Rafael Amado: By year-end, we expect to submit an IND for ZL-1311, a next-generation T-cell engager targeting MUC17, a promising target for gastrointestinal cancers. In summary, we have the infrastructure and capacity to advance multiple global programs at different stages of development simultaneously at speed and efficiency and across geographies, while also advancing a regional pipeline. We have significant data emerging throughout the year on our most advanced products. I look forward to sharing it with you in the coming months. With that, I'll hand it over to Yajing.

Speaker #4: By year-end, we expect to submit an IND for GL1311, a next-generation T-cell engager targeting musin-17, a promising target for gastrointestinal cancers. In summary, we have the infrastructure and capacity to advance multiple global programs at different stages of development simultaneously, at speed and efficiency, and across geographies, while also advancing a regional pipeline.

Speaker #4: We have significant data emerging throughout the year on our most advanced products, and I look forward to sharing it with you in the coming months.

Speaker #4: And with that, I'll hand it over to Yajing.

Yajing Chen: Thank you, Rafael Amado. As Samantha Du and Rafael Amado described, Zai Lab is entering the next phase of its evolution. From a financial perspective, our objective is straightforward. Build on our commercially profitable business while investing with discipline behind the innovation that will drive our next stage of growth. In Q2, net product revenue grew 11% sequentially to $105.8 million, and the business remained commercially profitable. ZEJULA was steady. VYVGART volumes grew double digits sequentially. NUZYRA in the end remains strong despite supply constraints, and KarXT launch is off to an excellent start. In H2, we expect to further stabilize product sales while laying the foundation for a return to a meaningful growth in 2027. KarXT is expected to be a key driver of that growth.

Speaker #1: Thank you, Rafael. As Samantha and Rafael described, Zai Lab is entering the next phase of its evolution. From a financial perspective, our objective is straightforward: build on our commercially profitable business while investing with discipline behind the innovation that will drive our next stage of growth.

Speaker #1: In the second quarter, net product revenue grew 11% sequentially to $105.8 million, and the business remained commercially profitable. The JULA was steady, Vivigard's volumes grew double digits sequentially, Zydura demand remained strong despite supply constraints, and Cox T's launch is off to an excellent start.

Speaker #1: In the second half of the year, we expect to further stabilize product sales while laying the foundation for a return to a meaningful growth in 2027.

Speaker #1: Cox T is expected to be a key driver of that growth. As the first new mechanism of action for schizophrenia in decades. With efficacy across positive and negative symptoms, no box warnings, and inclusion in national treatment guidelines, we believe Cox T is well-positioned to address a significant unmet need.

Yajing Chen: As the first new mechanism of action for schizophrenia in decades with efficacy across positive and negative symptoms, no box warning, and inclusion in national treatment guidelines, we believe KarXT is well-positioned to address a significant unmet need. Early physician interest and positive patient experiences are encouraging. We are building good momentum ahead of potential NRDL inclusion in 2027. For the VYVGART franchise, we intend to seek an NRDL inclusion for VYVGART Hytrulo and are preparing for a gradual transition from IV to subQ. As a result, reported revenue in H2 may not fully reflect underlying demand due to timing of NRDL-related commercial dynamics. Looking ahead to 2027, we are confident in a return to meaningful growth, supported by new product launches, potential NRDL product inclusion, and continued demand growth across our key brands.

Speaker #1: Early physician interest and positive patient experiences are encouraging. And we are building good momentum ahead of potential NRDO inclusion in 2027. For the Vivigard franchise, we intend to seek NRDO inclusion for Vivigard Hychulo, and are preparing for a gradual transition from IV to subcue.

Speaker #1: As a result, reported revenue in the second half may not fully reflect underlying demand, due to timing of NRDO-related commercial dynamics. Looking ahead to 2027, we are confident in a return to meaningful growth, supported by new product launches, potential NRDO product inclusions, and continued demand growth across our key brands.

Yajing Chen: Beyond 2027, we expect our internally developed pipeline to become an increasingly important contributor to both revenue and margins. On expenses, we remain disciplined, prioritizing our highest value programs while improving productivity through streamlining the organization and the use of AI across clinical development, regulatory, commercial, and corporate functions. As a result, we expect operating expenses to remain broadly stable through the remainder of the year. We ended Q2 with $717.5 million in cash, providing the financial flexibility to continue investing in the highest value opportunities. Pulling this together, we have a commercially profitable business, disciplined capital allocation, and a global innovative pipeline that will increasingly shape the company's future growth and drive substantial value for patients and shareholders alike. With that, I will open it up for questions.

Speaker #1: Beyond 2027, we expect our internally developed pipeline to become an increasingly important contributor to both revenue and margins. On expenses, we remain disciplined, prioritizing our highest value programs while improving productivity through streamlining the organization and the use of AI across clinical development, regulatory, commercial, and corporate functions.

Speaker #1: As a result, we expect operating expenses to remain broadly stable through the remainder of the year. We ended the quarter with $717.5 million in cash.

Speaker #1: Providing the financial flexibility to continue investing in the highest value opportunities. Pulling this together, we have a commercially profitable business, disciplined capital allocation, and a global innovative pipeline that will increasingly shape the company's future growth and drive substantial value for patients and shareholders alike.

Speaker #1: With that, I will open it up for questions.

Operator: Thank you. We will now begin the question and answer session. To ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Please stand by while we compile the Q&A roster. We will now take our first question from the line of Anupam Rama from JPMorgan. Please ask your question.

Speaker #2: Thank you. We will now begin the question-and-answer session. To ask a question, please press star 11 on your telephone and wait for your name to be announced.

Speaker #2: To withdraw your question, please press star 11 again. Please stand by while we compile the Q&A roster. We will now take our first question from the line of Anupam Rama from JPMorgan.

Speaker #2: Please ask your question.

Anupam Rama: Hey, guys. Thanks so much for taking the question. Just looking to ESMO, can you walk us through what you're looking for in the first line small cell study of zoci plus IO, plus or minus chemo? What's going to be the size and scope of that data set, and how are you defining a win scenario?

Speaker #4: Hey, guys. Thanks so much for taking the question. Just looking to Ezmo, can you walk us through what you're looking for in the first-line small cell study of Zosy plus IL plus or minus chemo?

Speaker #4: What's going to be the size and scope of that data set, and how are you defining a win scenario?

Christine Chiou: Thank you, Anupam. This is Christine. Rafael, could you take that question, please?

Speaker #3: Thank you, Anupam. As says Christine, Rafael, could you take that question, please?

Rafael G. Amado: Sure. At ESMO, we expect to present about 60 patients worth of data. This will include doublet and triplet, but most patients will be in the doublet with a checkpoint inhibitor at the highest dose of 1.6 milligrams per kilogram. We have been monitoring that data, and we think we'll be fairly mature by the time of ESMO, with a median follow-up between eight or nine months. We will be able to report on a meaningful data set by then. In terms of what to look for, I think the benchmark with the checkpoint inhibitor studies have shown responses in the 60% to 70% with chemotherapy and median progression-free survival of about five months. There's still room for improvement in the about 80% response rate or so, and a 50% increase in median PFS would be, I think, clinically meaningful.

Rafael Amado: Sure. At ESMO, we expect to present about 60 patients worth of data. This will include doublet and triplet, but most patients will be in the doublet with a checkpoint inhibitor at the highest dose of 1.6 milligrams per kilogram. We have been monitoring that data, and we think we'll be fairly mature by the time of ESMO, with a median follow-up between eight or nine months. We will be able to report on a meaningful data set by then. In terms of what to look for, I think the benchmark with the checkpoint inhibitor studies have shown responses in the 60% to 70% with chemotherapy and median progression-free survival of about five months. There's still room for improvement in the about 80% response rate or so, and a 50% increase in median PFS would be, I think, clinically meaningful.

Speaker #4: Sure. So at Ezmo, we expect to present about 60 patients' worth of data. This will include doublet and triplet, but most patients will be in the doublet with checkpoint inhibitor.

Speaker #4: At the highest dose of 1.6 milligrams per kilogram. We have been monitoring that data and we think we'll be fairly mature by the time of Ezmo with a medium follow-up between 8 or 9 months.

Speaker #4: So we will be able to report on a meaningful data set by then. In terms of what to look for, I think the benchmark with the checkpoint inhibitor studies have shown responses in the 60 to 70 percent with chemotherapy.

Speaker #4: And median follow-up—sorry, progression-free survival—of about 5 months. So there's still room for improvement in the approximately 80% response rate or so.

Speaker #4: And a 50 percent increase in medium PFS would be I think clinically meaningful. So those are sort of the parameters that we're looking for.

Rafael G. Amado: Those are sort of the parameters that we're looking for. We're obviously, at the same time, we're preparing this data set moving forward with operationalizing the study. It's going to be a chemo-sparing study, not because we saw any DLTs with the triplet, but because we think it's more convenient, and we will be able to give higher dose intensity of zoci than chemotherapy does.

Rafael Amado: Those are sort of the parameters that we're looking for. We're obviously, at the same time, we're preparing this data set moving forward with operationalizing the study. It's going to be a chemo-sparing study, not because we saw any DLTs with the triplet, but because we think it's more convenient, and we will be able to give higher dose intensity of zoci than chemotherapy does.

Speaker #4: We're obviously at the same time that we're preparing this data set moving forward with operationalizing the study. And it's going to be a chemo sparing study.

Speaker #4: Not because we saw any DLTs with the triplet, but because we think it's more convenient and we will be able to give higher dose intensity of Zosy than chemotherapy does.

Anupam Rama: Thanks so much for taking our question.

Speaker #4: Thanks so much for taking our question.

Operator: Thank you. We will now take our next question. The next question comes from Michael Yee from UBS. Please ask your question, Michael.

Speaker #2: Thank you. We will now take our next question. And the next question comes from Michael E from UBS. Please ask your question, Michael.

Kyle Yang: Good morning, guys. Thanks for taking our questions. This is Kyle Yang for Michael. Two for us. The first one, on the higher level, the company previously guided towards profitability by end of 2025. How should we think about that, and at what point do you think investors can start to revisit the profitability goal? The second question is on IL-13, IL-31. The atopic dermatitis landscape is getting increasingly competitive. We recently saw additional investor interest in the space, including a new IPO this week that also has an IL-13, IL-31. How should we think about the differentiation of your asset versus your competitors? Thank you.

Speaker #5: Good morning, guys. Thanks for taking our questions. This is Kyle Yang for Michael. A 2 for us. The first one on the higher level, the company previously guided toward profitability by end of 2025.

Speaker #5: So how should we think about that? And at what point do you think investors can start to revisit the profitability goal? The second question is on IL-13, IL-31.

Speaker #5: The atopic dermatitis landscape is getting increasingly competitive, and we recently saw additional investor interest in the space, including a new IPO this week. Also, that has an IL-13, IL-31.

Speaker #5: So how should we think about the differentiation of your asset versus your competitors? Thank you.

Christine Chiou: Thank you, Kyle. Yajing, can you please take the one on profitability? Rafael, the question on the 1503 differentiation, please?

Speaker #3: Thank you, Kyle. Yajing, can you please take the one on profitability? And Rafael, the question on the 1503 differentiation, please.

Yajing Chen: All right. Thanks for the question. I'm really looking at the profitability through the lens of our capital allocation. We already have a commercially profitable business today. Our local manufacturing is on track for NUZYRA and Xpovio. That will continue to improve our profitability. However, at the same time, we have multiple global competitive programs that we believe have the potential to create substantially greater long-term value.

Speaker #1: All right. Thanks for the question. So I'm really looking at the profitability through the lens of our capital allocation. So we already have a commercially profitable business today.

Speaker #1: Our local manufacturing is on track for Zadura and Cox D. That will continue to improve our profitability. However, at the same time, we have multiple global competitive programs that we believe have the potential to create substantially greater long-term value.

Speaker #1: So right now, our responsibility is to invest where the returns justify it. We do maintain a very high bar for every investment decision. So in summary, we are kind of growing in revenue, with our potential global approval in 2028, which will improve margin drive operating efficiencies across the organization at the same time.

Yajing Chen: Right now, our responsibility is to invest where the returns justify it. We do maintain a very high bar for every investment decision. In summary, we are growing in revenue with our potential global approval in 2028, which will improve margin drive operating efficiencies across the organization at the same time. Believe those factors adding together will naturally lead to the profitability over time and continue to improve the profitability over time as well.

Speaker #1: So we believe those factors, added together, will naturally lead to profitability over time and continue to improve profitability as well.

Rafael G. Amado: Yeah, this is Rafael. Just make a few comments about ZL-1503. The drug, as you know, is designed to have three highly desirable attributes. The first one was robust skin clearance, and I think this is through Th2 suppression, but by breaking this cycle of itching, scratching, and inflammation that we see. I think by inhibiting the receptor, the 31 receptor, we should see a brisk reduction in pruritus. We also have a molecule that is YTE modified, the extended dosing interval that's going to be tested in the current study that is ongoing, both in healthy volunteers and MADs. We expect that it will be superior to the standards at the moment with its every one month and Dupixent every two weeks. We expect to go beyond that. There are a few agents that actually have these three simultaneous attributes.

Rafael Amado: Yeah, this is Rafael. Just make a few comments about ZL-1503. The drug, as you know, is designed to have three highly desirable attributes. The first one was robust skin clearance, and I think this is through Th2 suppression, but by breaking this cycle of itching, scratching, and inflammation that we see. I think by inhibiting the receptor, the 31 receptor, we should see a brisk reduction in pruritus. We also have a molecule that is YTE modified, the extended dosing interval that's going to be tested in the current study that is ongoing, both in healthy volunteers and MADs. We expect that it will be superior to the standards at the moment with its every one month and Dupixent every two weeks. We expect to go beyond that. There are a few agents that actually have these three simultaneous attributes.

Speaker #4: Yeah, this is Rafael. I'm just making a few comments about 1503. So the drug, as you know, is designed to have three highly desirable attributes.

Speaker #4: The first one was robust skin clearance. And I think this is through TH2 suppression, but by breaking the cycle of itching, scratching, and inflammation that we see.

Speaker #4: I think by inhibiting the receptor, there are 31 receptor, which should see a brisk reduction in pruritus. We also have a molecule that is YT modified.

Speaker #4: So, the extended dosing interval that's going to be tested in the current study is ongoing, both in healthy volunteers and MADs, but we expect it will be superior to the standards at the moment, with its levery every one month and dupi every two weeks.

Speaker #4: So, we expect to go beyond that. And there are a few agents that actually have these three simultaneous attributes. Some of them are preclinical; some of them are targeting the ligand, and some of them are targeting the receptor.

Rafael G. Amado: Some of them are preclinical, some of them are targeting the ligand, some of them are targeting the receptor. We believe that targeting IL-13 ligand and targeting 31 receptor, the Yt modification will result in both better reported outcomes with regards to pruritus, which is really morbid in these patients, but also improvement in inflammation. Also this is an under-penetrated market where there isn't really a winner takes all, if you will. I think any improvement in quality of life, dose extension, and more importantly, inflammation and patient symptoms, will allow for these drugs to have a role in atopic dermatitis. We're also moving very fast with the phase I study, and we expect to, as we've guided before, present healthy volunteers data this year, next year, the MAD data in atopic dermatitis. We are a bit ahead of some of the competitors.

Rafael Amado: Some of them are preclinical, some of them are targeting the ligand, some of them are targeting the receptor. We believe that targeting IL-13 ligand and targeting 31 receptor, the Yt modification will result in both better reported outcomes with regards to pruritus, which is really morbid in these patients, but also improvement in inflammation. Also this is an under-penetrated market where there isn't really a winner takes all, if you will. I think any improvement in quality of life, dose extension, and more importantly, inflammation and patient symptoms, will allow for these drugs to have a role in atopic dermatitis. We're also moving very fast with the phase I study, and we expect to, as we've guided before, present healthy volunteers data this year, next year, the MAD data in atopic dermatitis. We are a bit ahead of some of the competitors.

Speaker #4: We believe that targeting IL-13 ligand and targeting 31 receptor, the YT modification will result in both better reported outcomes with regards to pruritus, which is really morbid in these patients, but also improvement in inflammation.

Speaker #4: And also, this is an underpenetrated market where there isn't really a winners takes all, if you will. So I think any improvement in quality of life, dose extension, and more importantly, inflammation and patient symptoms will allow for these drugs to have a role in atopic dermatitis.

Speaker #4: So we're also moving very far very fast with the phase one study and we expect to, as we've guided before, present healthy volunteer state at this year and then next year the MAD data in atopic dermatitis.

Speaker #4: So we are a bit ahead of some of the competitors.

[Company Representative] (Zai Lab): Thank you.

Kyle Yang: Thank you.

Speaker #5: Thank you.

Operator: Thank you. We will now take our next question from Lee Woksick from Cantor. Please go ahead, Lee. Your line is open.

Speaker #2: Thank you. We will now take our next question from Lee Wok Sik from Canto. Please go ahead, Lee. Your line is open.

Lee Woksick: Hey, guys. Thank you very much for taking our questions. I have one pipeline and one commercial question. For ZL-1503, the bispecific antibody, just wondering what is the potential dosing profile that you're looking for, and how would the set data later this year inform you on the drug profile and your lead trends on ADA from the MAD cohort? The second question is on the commercial side. Just at a high level, how do you envision the China business to evolve in the coming quarters? What are the metrics that are most important to you?

Li Watsek: Hey, guys. Thank you very much for taking our questions. I have one pipeline and one commercial question. For ZL-1503, the bispecific antibody, just wondering what is the potential dosing profile that you're looking for, and how would the set data later this year inform you on the drug profile and your lead trends on ADA from the MAD cohort? The second question is on the commercial side. Just at a high level, how do you envision the China business to evolve in the coming quarters? What are the metrics that are most important to you?

Speaker #6: Hey, guys. Thank you very much for taking our questions. I have one pipeline and one commercial question. For 1503, the bispecific antibody just wondering what is the potential dosing profile that you're looking for and how would a set data later this year inform you on the drug profile and early trends on ADA from the MAT cohort?

Speaker #6: And the second question is on the commercial side. Just at a high level, how do you envision the China business to evolve in the coming quarters?

Speaker #6: What are the metrics that are most important to you?

Christine Chiou: Thank you, Lee. Rafael, can you take the question on the dosing profile for ZL-1503 and how the upcoming data will inform on the profile and on ADA? Then Yijun, if you can address the commercial question.

Speaker #3: Thank you, Lee. Rafael, can you take the question on the dosing profile for 1503 and how the upcoming data will inform on the profile and on ADA?

Speaker #3: And then, Deidre, if you can address the commercial question.

Speaker #4: Yeah. So in the healthy volunteers data, it's a single IV injection and we have six cohorts we're testing four doses. There's single injections and the patients are being followed long-term.

Rafael G. Amado: In the healthy volunteers data, it is a single IV injection, and we have six cohorts. We are testing four doses. They are single injections, and the patients are being followed long-term. This will inform us mostly on tolerability and PK, including half-life, and then the biomarkers that I mentioned in the prepared remarks, including immunogenicity of anti-drug antibodies. The MAD has two cohorts with two doses, also IV, and it is a larger cohort. I think to hone into the dose, we will need to do a bit more experimentation. There is a bioequivalence study that will compare the IV to the sub-Q, and then we will do more dose experimentation with the subcutaneous dose. We expect that there will be a short induction course, followed by a longer maintenance dosing, but it is premature to speculate on the actual dose.

Rafael Amado: In the healthy volunteers data, it is a single IV injection, and we have six cohorts. We are testing four doses. They are single injections, and the patients are being followed long-term. This will inform us mostly on tolerability and PK, including half-life, and then the biomarkers that I mentioned in the prepared remarks, including immunogenicity of anti-drug antibodies. The MAD has two cohorts with two doses, also IV, and it is a larger cohort. I think to hone into the dose, we will need to do a bit more experimentation. There is a bioequivalence study that will compare the IV to the sub-Q, and then we will do more dose experimentation with the subcutaneous dose. We expect that there will be a short induction course, followed by a longer maintenance dosing, but it is premature to speculate on the actual dose.

Speaker #4: This will inform us mostly on tolerability and PK, including half-life. And then the biomarkers that I mentioned in the prepared remarks, including immunogenicity of antibody antidrug antibodies.

Speaker #4: The MAD has two cohorts with two doses, also IV, and it's a larger cohort. I think to hone in on the dose, we will need to do a bit more experimentation.

Speaker #4: There's about equivalency study that will compare the IV to the subcu and then we will do more dose experimentation with the subcutaneous dose. We expect that there will be a short induction course followed by a longer maintenance dosing, but it's premature to speculate on the actual dose.

Speaker #4: So and on the question about antibody-drug conjugates, obviously we're looking at this and we will be reporting on this suffice it to say that the study continues.

Rafael G. Amado: On the question of our antibody drug conjugates, obviously, we are looking at this and we will be reporting on this. Suffice it to say that the study continues.

Rafael Amado: On the question of our antibody drug conjugates, obviously, we are looking at this and we will be reporting on this. Suffice it to say that the study continues.

Yizhe Wang: Okay. Hi, Lee, and hi, everybody. This is Yijun here, I am speaking in China right now. Can you hear me okay? Good signal?

Speaker #5: Okay. Hi, Lee. And hi, everybody. This is Ito here. And I'm speaking within China right now. Can you hear me okay? Good signal?

Lee Woksick: Yes. Hearing you.

Li Watsek: Yes. Hearing you.

Speaker #6: Yes.

[Company Representative] (Zai Lab): Okay. Very good. Great. Commercial. First of all, I just want to say, three months in a row, I look at Zai commercial, it's not just the China business only, right? If you look out three-year horizon, we have the potential to launch our Zai first US asset or global asset, very exciting. That is ZY303. That being said, the near term, absolutely our focus should be focusing on our regional business, which is primarily our China business. My view is this, we actually have a pretty sizable business, okay? With a diverse mix. Some are CSO products, some are promoted by our power self. From my perspective, it's very important going forward to be very focused. Focus on three key brands.

Yizhe Wang: Okay. Very good. Great. Commercial. First of all, I just want to say, three months in a row, I look at Zai commercial, it's not just the China business only, right? If you look out three-year horizon, we have the potential to launch our Zai first US asset or global asset, very exciting. That is ZY303. That being said, the near term, absolutely our focus should be focusing on our regional business, which is primarily our China business. My view is this, we actually have a pretty sizable business, okay? With a diverse mix. Some are CSO products, some are promoted by our power self. From my perspective, it's very important going forward to be very focused. Focus on three key brands.

Speaker #5: Okay. Very good. Great, great, great. Okay. So commercial. First of all, I just want to say, three months in a row I look at that commercial—it's not just the China business only, right?

Speaker #5: If you look out three-year horizon, where the potential to launch our Zai first US assets or global assets very exciting. That is Zosi. But that said, being said, the near-term absolutely our focus should be focusing on our regional business, which is primarily our China business.

Speaker #5: So my view is this: we actually have a pretty sizable business, okay? But with a diverse mix. Some are CSO products, some are promoted by ourselves.

Speaker #5: So from my perspective, it's very important going forward to be very focused. The focus on three key brands. That is returns edula to growth and continue growth on the volume growth underlying demand on FGAR and also launch excellence for CAR-XT, okay?

[Company Representative] (Zai Lab): That is, return ZEJULA to growth, continue growth on the volume growth underlying demand on FGAR, and also launch excellence for KarXT. Okay? For execution front, we must go back to the basics. We have to be very good at, I call it brilliant at the basics, really drive the metrics. You asked me about what are some of the potential KPIs. It's all about underlying demand. For example, for each of these brands, the new patient start will be critically important. We like to see the signal continue. For those who flatten, we want to return to growth. For those hasn't been growing, we want to continue to grow or potentially accelerate. We have seen these signals, right?

Yizhe Wang: That is, return ZEJULA to growth, continue growth on the volume growth underlying demand on FGAR, and also launch excellence for KarXT. Okay? For execution front, we must go back to the basics. We have to be very good at, I call it brilliant at the basics, really drive the metrics. You asked me about what are some of the potential KPIs. It's all about underlying demand. For example, for each of these brands, the new patient start will be critically important. We like to see the signal continue. For those who flatten, we want to return to growth. For those hasn't been growing, we want to continue to grow or potentially accelerate. We have seen these signals, right?

Speaker #5: For execution from, we must go back to the basics. We have to be very good at, I call it brilliant at the basics. Really drive the metrics.

Speaker #5: So you asked me about what are some of the potential KPIs. So it's all about underlying demand. So for example, for each of these brands, the new patient style will be critically important.

Speaker #5: We like to see the signal continue for those who flatten, we want to return. The growth, and for those has been growing, we want to continue to grow or potentially accelerate.

Speaker #5: We have seen these signals, right? And that will lead to, I think, in the next couple of quarters, a consolidation or solidification of our stabilization of revenue and eventually turning into a very meaningful growth in 2027, okay?

[Company Representative] (Zai Lab): That will lead to, I think, in the next couple of quarters, a consolidation or solidification of our stabilizing revenue, and eventually turning to a very meaningful growth in 2027. Okay, that is where we are. In the upcoming quarter, I look for is, as you see, Q2, we actually delivered at 11% sequential quarter-over-quarter growth. In the upcoming quarter, I see quite confidently we can solidify that, and then in the meantime, really improving our underlying demand and setting ourself up for a very good next year. During this period, we also will focus on a couple of NRDL negotiations. We want to make sure we win, and we win at a good price.

Yizhe Wang: That will lead to, I think, in the next couple of quarters, a consolidation or solidification of our stabilizing revenue, and eventually turning to a very meaningful growth in 2027. Okay, that is where we are. In the upcoming quarter, I look for is, as you see, Q2, we actually delivered at 11% sequential quarter-over-quarter growth. In the upcoming quarter, I see quite confidently we can solidify that, and then in the meantime, really improving our underlying demand and setting ourself up for a very good next year. During this period, we also will focus on a couple of NRDL negotiations. We want to make sure we win, and we win at a good price.

Speaker #5: So that is what we are. So in the second, in the upcoming quarter, I look for is as you see the second quarter, we actually delivered at the 11% sequential quarter over quarter growth.

Speaker #5: So in the upcoming quarter, we I see quite confidently we can solidify that. And then really in the meantime, really improving our underlying demand and setting ourselves up for a very good next year.

Speaker #5: And during this period, we also will focus on a couple of NRDL negotiations, right? We want to make sure we win. We win at a good price.

Christine Chiou: Thank you, Jun. Next question, operator.

Speaker #3: Thank you, Deidre. Next question, operator.

Operator: Thank you. Our next question comes from the line of Eagle Nuetravitz from Citi. Please ask your question, Eagle. Your line is open.

Speaker #2: Thank you. Our next question comes from the line of Igo Nochovmovits from City. Please ask your question. Igo, your line is open.

[Analyst] (Citi): Hi, this is Caroline. I am through Eagle. Thanks for taking our question. We are wondering, as your MUC17 T-cell engager approaches the clinic, what aspects of the preclinical profile give you the greatest confidence it can overcome historical challenges associated with T-cell engagers in solid tumors? Thanks.

Caroline DePaul: Hi, this is Caroline. I am through Eagle. Thanks for taking our question. We are wondering, as your MUC17 T-cell engager approaches the clinic, what aspects of the preclinical profile give you the greatest confidence it can overcome historical challenges associated with T-cell engagers in solid tumors? Thanks.

Speaker #6: Hi, this is Caroline on for Igo. Thanks for taking our question. We're wondering, as your MUC-17 T-cell engager approaches the clinic, what aspects of the preclinical profile give you the greatest confidence that can overcome historical challenges associated with T-cell engagers in solid tumors?

Speaker #6: Thanks.

Christine Chiou: Rafael, if you can take this one on MUC17 T cell. TCE.

Speaker #3: Rafael, if you can take this one on MUC-17 T-cell.

Rafael G. Amado: Sure. Yes. This is MUC17 T-cell engager. It is an interesting target. It is in GI tumors, more prominently in gastric, pancreas, and other tumors of the GI tract. It is engineered to be biparatopic, so it targets more than one epitope, so hopefully the avidity will be higher. The CD3 is silenced by a higher on and off rate. We believe that hopefully in the clinic we will ameliorate cytokine release syndrome, which is really the Achilles heel of these products, in that they need to be given in the hospital because of the emergence of CRS. A lot of the innovation in this field, as you probably know, is directed to increasing efficacy, but also decreasing the potential toxicity related to CRS, so that eventually one day, these products can be given in the community.

Rafael Amado: Sure. Yes. This is MUC17 T-cell engager. It is an interesting target. It is in GI tumors, more prominently in gastric, pancreas, and other tumors of the GI tract. It is engineered to be biparatopic, so it targets more than one epitope, so hopefully the avidity will be higher. The CD3 is silenced by a higher on and off rate. We believe that hopefully in the clinic we will ameliorate cytokine release syndrome, which is really the Achilles heel of these products, in that they need to be given in the hospital because of the emergence of CRS. A lot of the innovation in this field, as you probably know, is directed to increasing efficacy, but also decreasing the potential toxicity related to CRS, so that eventually one day, these products can be given in the community.

Speaker #4: Sure. Yes, this is the MUC-17 T-cell engager. It's an interesting target. It's in GI tumors—more prominently in gastric, pancreas, and other tumors of the GI tract.

Speaker #4: It is engineered to be biparatopic, so it targets more than one epitope. Hopefully, the avidity will be higher. The CD3 is silenced by a higher on and off rate.

Speaker #4: And we believe that hopefully in the clinic will ameliorate cytokine release syndrome, which is really the Achilles heel of this product in that they need to be given in the hospital because of the emergence of CRS.

Speaker #4: So a lot of the innovation in this field, as you probably know, is directed to increasing efficacy, but also decreasing the potential toxicity related to CRS.

Speaker #4: So that eventually one day these products can be given in the community. We can say that per clinically, as we prepare to the IND, the product looks really to have great properties, compares to other potential products in this target, including competitors.

Rafael G. Amado: We can say that preclinically, as we prepare to the IND, the product looks really to have great properties compared to other potential products in this target, including competitors. We're pretty excited about it, and we're moving forward with the goal of having this IND out by the year's end.

Rafael Amado: We can say that preclinically, as we prepare to the IND, the product looks really to have great properties compared to other potential products in this target, including competitors. We're pretty excited about it, and we're moving forward with the goal of having this IND out by the year's end.

Speaker #4: So we're pretty excited about it. And we're moving forward with the goal of having this IND out by the year's end.

[Analyst] (Citi): Thank you.

Caroline DePaul: Thank you.

Speaker #6: Thank you.

Speaker #2: Thank you. We would now take our next question from Dina Grebosch from Livering Partners. Please ask your question, Dina. Your line is open.

Operator: Thank you. We will now take our next question from Daina Graybosch from Leerink Partners. Please ask your question, Dana. Your line is open.

Daina Graybosch: Hi. Thank you for the question. I wonder if you can talk about the combination of your DLL3 ADC with the DLL3 targeted T-cell engager, and sort of mechanistically and biologically why that has value or differentiation relative to combining a DLL3 T-cell engager with a B7-H3 ADC?

Speaker #6: Hi. Thank you for the question. I wonder if you can talk about the combination of your DL3 ADC with the DL3 targeted T-cell engager.

Speaker #6: And sort of mechanistically and biologically, why that has value or differentiation relative to combining a DL3 T-cell engager with a B7H3 ADC?

Christine Chiou: Thank you, Daina. It's great to have you on the call. Rafael, can you address the question on the combo of zoci plus TCE and why it may have value and differentiation versus a B7-H3 combo?

Speaker #3: Thank you, Dana. It's great to have you on the call. Rafael, can you address the question on the combo of Zosi plus TCE and why it may have value and differentiation versus a B7H3 combo?

Rafael G. Amado: Yeah. The more simplistic reason is that the mechanisms of action are orthogonal. They are very different. One is a cytotoxic that can debulk tumors, particularly small cell lung cancer that can present with a high volume disease, and then allow T cells to eliminate residual disease and maintain immune surveillance. As the ADC kills these tumor cells, it liberates other antigens that are new antigens. The T cells, even though they're directed to DLL3, can respond to these new antigens, particularly when they're combined with PD-1. This is a combination which is really targeted to bring in cytotoxicity as well as IO into the tumor. In the case of zoci and Imdelltra, for instance, the epitopes are different, so both drugs can actually bind in the same cell. It's known that the density of receptors that are required for ADCs and TCEs are different.

Rafael Amado: Yeah. The more simplistic reason is that the mechanisms of action are orthogonal. They are very different. One is a cytotoxic that can debulk tumors, particularly small cell lung cancer that can present with a high volume disease, and then allow T cells to eliminate residual disease and maintain immune surveillance. As the ADC kills these tumor cells, it liberates other antigens that are new antigens. The T cells, even though they're directed to DLL3, can respond to these new antigens, particularly when they're combined with PD-1. This is a combination which is really targeted to bring in cytotoxicity as well as IO into the tumor. In the case of zoci and Imdelltra, for instance, the epitopes are different, so both drugs can actually bind in the same cell. It's known that the density of receptors that are required for ADCs and TCEs are different.

Speaker #4: Yeah. I mean, the more simplistic reason is that the mechanisms of action are orthogonal. They are very different. One is a cytotoxic that can debulk tumors, particularly small cell lung cancers that can present with a high volume disease.

Speaker #4: And then allow T-cells to eliminate residual disease and maintain immune surveillance. As the ADC kills these tumor cells, it liberates other antigens, which are neoantigens, and the T-cells—even though they're directed to DLL3—can respond to these neoantigens, particularly when they're combined with PD-1.

Speaker #4: So this is a combination which is really targeted to bringing in cytotoxicity as well as IO into the tumor. In the case of Zosi and Indeltra, for instance, the epitopes are different.

Speaker #4: So both drugs can actually bind in the same cell. And it's known that the density of receptors are required for ADCs and TCEs are different.

Rafael G. Amado: ADCs can bind even if there are lower receptors, because there's also a bystander effect that can affect cells that have low DLL3 expression. This is something obviously that still needs to be proven. We're doing the studies, and the studies aim to look at tolerability. The good news is that there aren't really overlapping toxicities except for potentially immunosuppression. With regards to whether DLL3 is the best target because it's the same target, there's a B7-H3 study that Amgen was conducting. It is on pause at the moment with Imdelltra as well. B7-H3 is not a tumor-specific target. It's present in normal tissue, including the lung epithelium. There's a potential for more toxicity, and in small cell lung cancer patients, lung toxicity can be problematic because of the incidence of ILD with ADCs.

Rafael Amado: ADCs can bind even if there are lower receptors, because there's also a bystander effect that can affect cells that have low DLL3 expression. This is something obviously that still needs to be proven. We're doing the studies, and the studies aim to look at tolerability. The good news is that there aren't really overlapping toxicities except for potentially immunosuppression. With regards to whether DLL3 is the best target because it's the same target, there's a B7-H3 study that Amgen was conducting. It is on pause at the moment with Imdelltra as well. B7-H3 is not a tumor-specific target. It's present in normal tissue, including the lung epithelium. There's a potential for more toxicity, and in small cell lung cancer patients, lung toxicity can be problematic because of the incidence of ILD with ADCs.

Speaker #4: ADCs can bind even if they are lower receptors because there's also a bystander effect. That can affect cells that have low DLL3 expression. So this is something obviously that still needs to be proven.

Speaker #4: We're doing the studies and the studies are aimed to look at tolerability. The good news is that there aren't really overlapping toxicities except for potential immunosuppression.

Speaker #4: And with regards to whether DLL3 is the same is the best target because it's the same target. There's a B7H3 study that Amjin was conducting it is on pause at the moment.

Speaker #4: With Indeltra as well. B7H3 is not a tumor-specific target. It's present in normal tissue, including the lung epithelium. So there's a potential for more toxicity and in small cell lung cancer patients, lung toxicity can be problematic because of the incidence of ILD with ADCs.

Speaker #4: So we think that having a safer target that is more tumor-specific is probably a better option. So we're looking forward to seeing the results of this combinations.

Rafael G. Amado: We think that having a safer target that is more tumor specific is probably a better option. We're looking forward to seeing the results of these combinations. Amgen obviously has data with B7-H3, but that hasn't been released. We look forward to looking at the dual DLL3 dual mechanism approach, and hopefully we'll have that data early next year.

Rafael Amado: We think that having a safer target that is more tumor specific is probably a better option. We're looking forward to seeing the results of these combinations. Amgen obviously has data with B7-H3, but that hasn't been released. We look forward to looking at the dual DLL3 dual mechanism approach, and hopefully we'll have that data early next year.

Speaker #4: Amgen obviously has data with B7H3, but that hasn't been released. And we look forward to looking at the dual DLL3, dual mechanism approach and hopefully we'll have that data early next year.

Operator: Right. Thank you. As a reminder, before we move to our next question, please press star one one if you wish to ask a question now. We will now take our next question from the line of Linh Zhao from Goldman Sachs. Please ask your question, Linh Zhao, your line is open.

Speaker #2: All right. Thank you. As a reminder, before we move to our next question, please press star 11 if you wish to ask a question now.

Speaker #2: We will now take our next question from the line of Ling Haichao from Gomisex. Please ask your question, Ling Hai, your line is open.

Linh Zhao: Thanks for taking my question. This is Linh Zhao from Goldman. A follow-up question on the zoci and DLL3 TCE combinations. We've seen that both Amgen and BI have initiated the phase I/II trials including different cohorts for both the late line and first line. For the RP2D in first line triplet exploration, wondering if the RP2D will still remain as 1.6 mg or there will be a dose titration to a different dose level. For the two phase I/II trials, what might be the expected time that we will see some data? Thanks.

Linhai Zhao: Thanks for taking my question. This is Linh Zhao from Goldman. A follow-up question on the zoci and DLL3 TCE combinations. We've seen that both Amgen and BI have initiated the phase I/II trials including different cohorts for both the late line and first line. For the RP2D in first line triplet exploration, wondering if the RP2D will still remain as 1.6 mg or there will be a dose titration to a different dose level. For the two phase I/II trials, what might be the expected time that we will see some data? Thanks.

Speaker #5: Thanks for taking my question. This is Ling Hai from Gomen. Just a follow-up question on the Zosi and DL3 TCE that both Amgen and BI have initiated the phase one, two trials, including different cohorts for both the late line and first line.

Speaker #5: And for the RP2D in first-line triplet exploration, I'm wondering if the RP2D will still remain at 1.6 MEK, or if there will be a dose titration to a different dose level.

Speaker #5: And for the two phase one, two trials, what might be the expected time that we will see some data? Thanks.

Speaker #3: Thank you, Ling Hai. Rafael, could you address a question on the RP2D dose for the Zosi plus T-cell engagers study?

Christine Chiou: Thank you, Linh Zhao. Rafael, could you address the question on the RP2D dose for the zoci plus T-cell engagers study?

Rafael G. Amado: Yes. The two immunotherapies, the PD-L1 as well as the T-cell engager will be used as standard doses. There may be some accommodation to be able to dose every 3 weeks just because zoci is dosed every 3 weeks. With regards to zoci, we're only exploring 2 doses and moving very fast. We're exploring 1.2 and 1.6 mg/kg. We don't have any reason to think that 1.6 won't be well-tolerated, so we hope that that will be the dose that we go on to expand. That's as much as we can say. The study's ongoing. The Amgen one is ongoing and accruing well. It's got a cohort of patients that are untreated, which I think is probably the most exciting cohort. As you know, the response rate with T-cell engagers is relatively modest.

Rafael Amado: Yes. The two immunotherapies, the PD-L1 as well as the T-cell engager will be used as standard doses. There may be some accommodation to be able to dose every 3 weeks just because zoci is dosed every 3 weeks. With regards to zoci, we're only exploring 2 doses and moving very fast. We're exploring 1.2 and 1.6 mg/kg. We don't have any reason to think that 1.6 won't be well-tolerated, so we hope that that will be the dose that we go on to expand. That's as much as we can say. The study's ongoing. The Amgen one is ongoing and accruing well. It's got a cohort of patients that are untreated, which I think is probably the most exciting cohort. As you know, the response rate with T-cell engagers is relatively modest.

Speaker #4: Yes. So the two immunotherapies, the PD-L1 as well as the T-cell engager will be used standard doses. The maybe some accommodation to be able to dose every three weeks, just because Zosi is dosed every three weeks.

Speaker #4: With regards to Zosi, we're only exploring two doses and moving very fast. We're exploring 1.2 and 1.6 milligrams per kilogram. We don't have any reason to think that 1.6 won't be well tolerated.

Speaker #4: So we hope that that will be the dose that we go on to expand. So that's as much as we can say. The study is ongoing.

Speaker #4: The Amgen one is ongoing and accruing well. And it's got a cohort of patients that are untreated, which I think is probably the most exciting cohort.

Speaker #4: As you know, the response rate with T-cell engagers is relatively modest. It's in the 30 to 40 percent, whereas the response rate with ADCs is very high.

Rafael G. Amado: It's in the 30% to 40%, whereas the response rate with ADCs is very high. You combine also differential response rates, differential durability of response, and then a potential immune surveillance that in phase III studies with T-cell engager, particularly with Imdelltra in second line, has led to a 6-month difference in survival. Again, mechanistically, this makes a lot of sense. Well, in terms of the doses, we hope that we won't have to modify our target dose that we have chosen across the development plan for zoci, which is 1.6 mg per kg.

Rafael Amado: It's in the 30% to 40%, whereas the response rate with ADCs is very high. You combine also differential response rates, differential durability of response, and then a potential immune surveillance that in phase III studies with T-cell engager, particularly with Imdelltra in second line, has led to a 6-month difference in survival. Again, mechanistically, this makes a lot of sense. Well, in terms of the doses, we hope that we won't have to modify our target dose that we have chosen across the development plan for zoci, which is 1.6 mg per kg.

Speaker #4: So you combine also differential response rates, differential durability response, and then a potential immune surveillance that in phase three studies with T-cell engagers, particularly with Indeltra, in second line has led to a six-month difference in survival.

Speaker #4: So again, mechanistically, this makes a lot of sense. And in terms of the doses, well, we hope that we won't have to modify our target dose that we have chosen across the development plan for Zosi, which is 1.6 mEQ per kid.

Speaker #5: And thanks. And when will we see the data results from the trials?

Linh Zhao: Thanks. When will we see the data readouts from the trials?

Linhai Zhao: Thanks. When will we see the data readouts from the trials?

Rafael G. Amado: Well, the trials are being operationalized by Amgen, even though we obviously work very closely with them, it will be probably a joint decision, they will take the lead as to when those results will be presented. My sense is that it will be next year, I can't tell you exactly when it will happen. I would probably guide towards the end, the H2 of the year.

Rafael Amado: Well, the trials are being operationalized by Amgen, even though we obviously work very closely with them, it will be probably a joint decision, they will take the lead as to when those results will be presented. My sense is that it will be next year, I can't tell you exactly when it will happen. I would probably guide towards the end, the H2 of the year.

Speaker #4: With the trials being operationalized by Amgen, so even though we obviously work very closely with them, it will be probably a joint decision, but they will take the lead as to when those results will be presented.

Speaker #4: My sense is that it will be next year, but I can't tell you exactly when it will happen. I would probably guide towards the end, the second half of the year.

Linh Zhao: That's very helpful. Thank you.

Linhai Zhao: That's very helpful. Thank you.

Speaker #5: That's very helpful. Thank you.

Speaker #2: Thank you. I'm showing no further questions. I'll now turn the conference back to Dr. Samantha Dhu for her closing comments.

Operator: Thank you. I am showing no further questions. I'll now turn the conference back to Dr. Seow Manderu for her closing comments.

Samantha Du: Thank you, operator. 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 Q3 2026. Operator, you may now disconnect this call.

Speaker #1: Thank you, operator. I want to thank everyone. For taking the time. To join us on a call today. We appreciate your support. And look forward to updating you again after the third quarter of 2026.

Speaker #1: Operator, you may now disconnect this call.

Operator: Thank you for your participation in today's conference. This does conclude the program. You may now disconnect your lines.

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