Zai Lab — Third Quarter 2026 Earnings Summary

Financial Performance:

• Total revenue was $108.2 million in Q3 2026, a 7% decrease year-over-year from $116.1 million in Q3 2025.
• Net product revenue was $107.6 million in Q3 2026, down 7% year-over-year from $115.4 million in Q3 2025, but up 2% sequentially from Q2 2026.
• Sequential net product revenue growth was driven by NUZYRA and the June 2026 launch of KarXT, partially offset by a decrease in OPTUNE due to competition in the glioblastoma market.
• Research and Development (R&D) expenses were $49.8 million in Q3 2026, compared to $47.9 million in Q3 2025.
• Selling, General and Administrative (SG&A) expenses were $70.1 million in Q3 2026, flat compared to $70.1 million in Q3 2025.
• Loss from operations was $63.0 million (GAAP) in Q3 2026, compared to $47.6 million (adjusted for non-cash expenses) in the same period.
• Net loss was $46.1 million in Q3 2026, or $0.04 per ordinary share ($0.41 per ADS), compared to a net loss of $36.0 million, or $0.03 per ordinary share ($0.33 per ADS), in Q3 2025.
• The increase in net loss was primarily attributed to a $13.6 million inventory write-down in 2026.
• Cash, cash equivalents, current restricted cash, and short-term investments totaled $659.7 million as of September 30, 2026, down from $717.5 million as of June 30, 2026.
• Short-term debt increased to $252.4 million as of September 30, 2026, from $204.5 million as of December 31, 2025.

Guidance and Future Outlook:

• Zai Lab anticipates a return to meaningful growth in 2027 as patient access expands for key products.
• The company expects 2027 to be a pivotal year with a potential first U.S. BLA submission for zoci.
• Major catalysts anticipated in 2027 include:
  • Advancement of zoci into a global Phase 3 study in 1L SCLC.
  • Potential interim analysis of the registrational DLLEVATE study (2L+ SCLC) in the second half of 2027, followed by a U.S. accelerated approval submission.
  • Topline data from the 2L epNECs expansion cohort expected in the first half of 2027, followed by a U.S. accelerated approval submission.
  • Initial patient data for ZL-1503 in atopic dermatitis expected in the first half of 2027.
• The company expects two additional oncology and immunology programs to enter the clinic in 2027.
• The China business is expected to return to growth in 2027.

Business Segments and Product Lines:

• Zoci (DLL3-Targeting ADC):
  • Presented compelling 1L ES-SCLC data at ESMO 2026: 81.8% confirmed ORR, 81.9% six-month PFS rate, and 9.1% Grade ≥3 zoci-related AEs.
  • Advancing the zoci 1.6 mg/kg plus atezolizumab doublet into a global Phase 3 study in 1L ES-SCLC by year-end 2026.
  • Evaluating combinations with T-cell engagers (TCEs) including tarlatamab (Amgen) and obrixtamig (Boehringer Ingelheim).
  • Completed enrollment in the 2L+ epNECs expansion cohort.
• ZL-1503 (IL-13/IL-31Rα bispecific antibody):
  • Advancing toward first-in-human data at ACAAI 2026 and atopic dermatitis patient data in H1 2027.
  • Completed enrollment in the global Phase 1 IV-to-SC bioavailability bridging study.
• VYVGART (Efgartigimod):
  • CDE accepted the CMC variation application for pre-filled syringe presentation for gMG and CIDP.
  • Partner argenx announced positive topline results from the Phase 3 ALKIVIA study in autoimmune myositis (IMNM and DM), meeting the primary endpoint.
  • Partner argenx discontinued the Phase 3 UNITY study in Sjögren's disease for futility.
• Elegrobart (Anti-IGF-1R):
  • Completed enrollment in the Phase 3 registrational study for thyroid eye disease in China.
• Other Pipeline:
  • ZL-6201 (LRRC15 ADC) topline results from dose-escalation portion expected in H1 2027.
  • ZL-1311 (MUC17/CD3) IND submission in the U.S. expected in 2026, with Phase 1 initiation in H1 2027.
  • ZL-1222 (PD-1/IL-12) IND submission and Phase 1 initiation expected in 2027.
  • Potential China sBLA submissions for efgartigimod in myositis, seronegative gMG, and ocular myasthenia gravis in 2027.
  • Enrollment in the global Phase 3 VitaliThy study (Graves' Disease) in Greater China expected in 2027.

Market and Competitive Landscape:

• OPTUNE revenue declined due to evolving competition in the glioblastoma market.
• Zai Lab positions zoci as a potential "ADC backbone of choice" in small cell lung cancer.
• ZL-1503 targets atopic dermatitis, described as one of the largest opportunities in immunology.

Risks and Challenges:

• Forward-looking statements regarding clinical trial results, regulatory approvals, and revenue growth are subject to inherent uncertainties and risks.
• Specific risks include the ability to successfully commercialize products, obtain funding, and navigate regulatory decisions.
• Risks related to doing business in China are explicitly noted.
• The discontinuation of the UNITY study highlights the risk of clinical trial futility.

Management Commentary and Tone:

• CEO Dr. Samantha Du described the period as "defining," expressing confidence in zoci's potential and the company's path to creating value for patients and shareholders.
• Dr. Du highlighted 2027 as a pivotal year for U.S. BLA submissions and the advancement of the first-line registrational strategy in SCLC.
• President Rafael G. Amado noted the encouraging efficacy and favorable safety profile of the zoci doublet, supporting the move to Phase 3.
• Management emphasized continued efforts to streamline the organization, optimize resource allocation, and enhance operating efficiency, reflected in flat R&D and SG&A expenses year-over-year.

Other Key Points:

• On October 27, 2026, the Company closed a private placement of 11,340,000 ADSs at $22.04 per ADS.
• The private placement generated gross proceeds of approximately $250.0 million, with net proceeds of approximately $241.2 million after fees and expenses.
• Net proceeds are intended to fund pipeline asset development, working capital, and general corporate purposes.
• The company reported a loss per ADS of $0.41 for Q3 2026, compared to $0.33 in Q3 2025.
• Foreign currency translation adjustments contributed to a comprehensive loss of $57.2 million for the quarter.