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ZAI LAB(ZLAB) - 2025 Q1 - Earnings Call Transcript
ZLABZAI LAB(ZLAB)2025-05-08 13:00

Financial Data and Key Metrics Changes - Total revenue grew 22% year over year to 106.5millioninQ12025,drivenbyincreasedsalesforVivGuard,Zejula,andNUZYRA[27]−Operatinglossimprovedby20106.5 million in Q1 2025, driven by increased sales for VivGuard, Zejula, and NUZYRA [27] - Operating loss improved by 20% to 56.3 million, and adjusted loss from operations decreased by 25% to 37.1million,reflectingoperationalefficiency[15][27]−Thecompanyreaffirmeditsfull−yearrevenueguidanceof37.1 million, reflecting operational efficiency [15][27] - The company reaffirmed its full-year revenue guidance of 560 million to 590million,anticipatingsignificantsalesgrowthinthelatterpartoftheyear[6][28]BusinessLineDataandKeyMetricsChanges−VivGuardsalesareexpectedtogrowfasterthantotalrevenuegrowth,withareboundinpatientvolumesobservedinMarchandAprilafteraseasonaldecline[11][12]−Otherproducts,includingZejulaandNUZYRA,showedsequentialgrowthsupportedbyNRDLaccess,withearlycontributionsfromnewlylaunchedproductslikeOGTYROandZACDURO[14]−ThecompanyispreparingfortheupcomingNRDLcycletargetingIVrenewalforgMGandinitiallistingoftheSCformulation,effectiveJanuary1,2026[12]MarketDataandKeyMetricsChanges−ThecompanynotedasignificantopportunityinthegMGmarketinChina,withapproximately70,000patients,andlessthan10590 million, anticipating significant sales growth in the latter part of the year [6][28] Business Line Data and Key Metrics Changes - VivGuard sales are expected to grow faster than total revenue growth, with a rebound in patient volumes observed in March and April after a seasonal decline [11][12] - Other products, including Zejula and NUZYRA, showed sequential growth supported by NRDL access, with early contributions from newly launched products like OGTYRO and ZACDURO [14] - The company is preparing for the upcoming NRDL cycle targeting IV renewal for gMG and initial listing of the SC formulation, effective January 1, 2026 [12] Market Data and Key Metrics Changes - The company noted a significant opportunity in the gMG market in China, with approximately 70,000 patients, and less than 10% currently receiving newer biologic therapies [60] - The competitive landscape for gMG is expected to benefit from the introduction of new therapies, which will enhance overall market education and treatment options [60] Company Strategy and Development Direction - The company aims to expand its global R&D pipeline, with a focus on innovative therapies and maintaining a balanced approach between in-house development and business development opportunities [8][100] - Investments are being made to accelerate the global R&D pipeline, with a commitment to advancing at least one global product to IND submission stage every year [23] - The company is focused on achieving profitability by Q4 2025, leveraging operational efficiencies and a robust late-stage pipeline [15][28] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving profitability by Q4 2025, citing strong business fundamentals and strategic direction [6][27] - The company anticipates accelerating sales growth in the next three quarters, which will translate into significant operating leverage [6] - Management highlighted the importance of new product launches and regulatory approvals in driving future growth [15][28] Other Important Information - The company ended the quarter with a strong cash position of 857.3 million, providing a solid foundation for future investments and growth initiatives [29] - The company is actively pursuing regulatory reviews for multiple products, including CAR XT for schizophrenia and TIVDAC for cervical cancer [15] Q&A Session Summary Question: Can you describe the sequential change in VIBGART sales? - Management indicated that the sequential decline was influenced by seasonal trends and inventory dynamics, with a strong recovery in patient volumes observed in March and April [31][32] Question: Are you comfortable with the current consensus for VIBGART and fiscal year revenues? - Management reaffirmed confidence in the revenue guidance range of 560millionto560 million to 590 million, indicating that VIBGART sales are expected to grow faster than overall sales growth [41] Question: How do recent FDA changes and tariffs impact Zai Lab? - Management noted no anticipated impact from tariffs, as local manufacturing is in place for many products, and FDA interactions have remained productive [46][50] Question: What is the competitive landscape for gMG in China? - Management expressed optimism about the competitive dynamics, stating that new approvals will benefit the overall market and enhance treatment options for patients [60] Question: What is the strategy regarding in-house developed assets versus in-licensing? - Management indicated a balanced approach, continuing to pursue both in-house development and high-quality external opportunities [100]