Zai Lab Ltd
For the period ended Sep 30, 2024. Filed Nov 12, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Nov 12, 2024
ZLAB$25.48+12.7%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-30; filed 2024-08-06.
0001628280-24-035231
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-11-12.
0001628280-24-046824
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 116 previous paragraphs and 124 current paragraphs.
71 unchanged; 34 reworded; 17 added; 9 removed; 2 previous and 2 current paragraphs rearranged.
Tables are not compared: 7 previous and 7 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (17)
Current report
•Early-Stage Global Pipeline: In October 2024, we presented data from a Phase I study of ZL-1310, an investigational DLL3-antibody-drug conjugate, in second-line+ extensive stage small cell lung cancer. The data, from the ongoing Part Ia monotherapy dose-escalation portion of the study, included results from 25 patients across four dose cohorts (0.8 mg/kg, 1.6 mg/kg, 2.0 mg/kg, 2.4 mg/kg). Findings from this study suggest that ZL-1310 delivers anti-tumor activity across multiple dose levels with an overall response rate of 74%. It was well tolerated across all dose levels with the majority of treatment emergent adverse events being Grade 1 or 2.
Current report
•Xanomeline and Trospium Chloride (KarXT):
Current report
◦Schizophrenia: In October 2024, we announced positive topline results from the Phase III bridging study evaluating the safety and efficacy of KarXT in schizophrenia in China. The study met its primary endpoint, with KarXT demonstrating a statistically significant and clinically meaningful 9.2-point reduction in the Positive and Negative Syndrome Scale (“PANSS”) total score compared to placebo at Week 5 (-16.9 KarXT vs. -7.7 placebo, p=0.0014). The study also met all secondary efficacy endpoints. We expect to submit a New Drug Application to the NMPA for KarXT for the treatment of patients with schizophrenia in early 2025.
Current report
In September 2024, our partner BMS announced that the FDA had approved KarXT, under the brand name COBENFY™, for the treatment of adult patients with schizophrenia. In October 2024, BMS announced new topline results from the Phase III EMERGENT-4 and EMERGENT-5 open-label trials evaluating the long-term efficacy, safety, and tolerability of KarXT in adults with schizophrenia over 52 weeks of treatment. In the analysis, KarXT was associated with continued improvements in symptoms of schizophrenia across all efficacy measures. KarXT continued to see a lack of weight gain, and it was not associated with movement disorders or metabolic changes.
Current report
•Early-Stage Global Pipeline: In September 2024, Zai Lab presented pre-clinical data of ZL-1503, an IL-13/IL-31 bi-specific antibody, at the European Academy of Dermatology and Venerology Congress 2024. The presentation discussed the potential of ZL-1503 as a novel treatment for moderate-to-severe atopic dermatitis, as well as other diseases involving the IL-13 and IL-31 pathways.
Current report
•Organizational Update: In September 2024, the Company appointed Prista Charuworn, M.D., as our Vice President, Immunology, Global R&D. Dr. Charuworn is an accomplished gastroenterologist with extensive experience and leadership in clinical development in hepatology and immunology. She reports to Rafael Amado, M.D., our President, Head of Global R&D, and is responsible for leading and advancing the R&D strategy for our immunology therapeutic area as well as our neuroscience and infectious disease assets. She previously held key leadership roles in clinical development at Amgen, AstraZeneca, and Gilead.
Current report
NM - Not Meaningful
Current report
Research and development expenses increased by $7.2 million in the three months ended September 30, 2024, primarily due to:
Current report
•a decrease of $4.5 million in personnel compensation and related costs primarily driven by the Company’s ongoing resource prioritization and efficiency efforts.
Current report
•a decrease of $3.3 million in personnel compensation and related costs primarily driven by the Company’s ongoing resource prioritization and efficiency efforts; and
Current report
•an increase of $3.3 million in licensing fees in connection with increased upfront and milestone payments for our license and collaboration agreements.
Current report
Research and development expenses attributable to pre-clinical programs increased by $12.4 million in the three months ended September 30, 2024 primarily due to an increase in licensing fees.
Current report
Selling, general, and administrative expenses decreased by $1.3 million the three months ended September 30, 2024, primarily due to:
Current report
•a decrease of $5.4 million in personnel compensation and related costs primarily driven by the Company’s ongoing resource prioritization and efficiency efforts; partially offset by
Current report
Foreign Currency Gains (Losses)
Current report
Foreign currency gain was $8.3 million in the nine months ended September 30, 2024, primarily driven by remeasurement gain due to appreciation of the RMB against the U.S. dollar, compared to foreign currency loss of $26.3 million in the nine months ended September 30, 2023, driven by remeasurement loss due to depreciation of the RMB against the U.S. dollar.
Current report
Other Income, Net
Removed paragraphs (9)
Previous report
•Repotrectinib: In May 2024, the NMPA approved the New Drug Application (“NDA”) for repotrectinib for the treatment of adult patients with locally advanced or metastatic ROS1-positive non-small cell lung cancer (“NSCLC”). The approval was based on the global Phase I/II TRIDENT-1 study that evaluated repotrectinib in TKI naïve and TKI-pretreated patients with ROS1-positive NSCLC. We participated in the Greater China portion of this study. In June 2024, our partner Bristol Myers Squibb(“BMS”) announced that the U.S. Food and Drug Administration (“FDA”) had granted accelerated approval of repotrectinib for the treatment of patients with NTRK-positive locally advanced or metastatic solid tumors.
Previous report
•Tisotumab Vedotin: In April 2024, our partner Pfizer Inc. and Genmab A/S announced that the FDA approved the supplemental Biologics License Application granting full approval for tisotumab vedotin (or TIVDAK®) for the treatment of patients with recurrent or metastatic cervical cancer with disease progression on or after chemotherapy. We are participating in the global Phase III innovaTV 301 trial and extension study in Greater China.
Previous report
In July 2024, the NMPA approved a Biologics License Application for efgartigimod SCas an add on to standard therapy for the treatment of adult patients with gMG who are anti-acetylcholine receptor (AChR) antibody positive.
Previous report
•Sulbactam-Durlobactam (SUL-DUR): In May 2024, the NMPA approved the NDA for SUL-DUR for the treatment of adult patients with hospital-acquired bacterial pneumonia and ventilator-associated bacterial pneumonia caused by susceptible isolates of Acinetobacter baumannii-calcoaceticus complex.
Previous report
•Xanomeline-Trospium (KarXT): In April 2024, our partner BMSpresented new interim long-term data from the Phase III EMERGENT program for the treatment of schizophrenia. In the new interim analysisof long-term efficacy data from the Phase 3 EMERGENT-4 open-label extension trial, KarXT was associated with significant improvement in symptoms of schizophrenia across all efficacy measures at 52 weeks, and in the new pooled interim long-term safety and metabolic outcomes from the Phase III EMERGENT-4 and EMERGENT-5 trials, KarXT demonstrated a favorable long-term metabolic profile where most patients experienced stability or improvements on metabolic parameters over 52 weeks of treatment. We are conducting a registrational bridging study in mainland China.
Previous report
•Early-Stage Global Pipeline: In May 2024, we initiated a global Phase II clinical trial evaluating the safety and efficacy of ZL-1102, an anti-IL-17 investigational therapy that we are internally developing, for the treatment of chronic plaque psoriasis.
Previous report
•Organizational Updates: In April 2024, Andrew Zhu joined Zai Lab as our Chief Commercial Officer in Greater China. Mr. Zhu’s rich experience in building innovative business models and resource integration will help us further enhance our commercial operations and drive sales and profit growth across Greater China. He joins us from Simcere Zaiming, where he most recently served as Chief Operating Officer responsible for the commercial and pharmaceutical business. He previously served in various operational, sales, and marketing leadership roles at leading global biopharmaceutical companies, including AstraZeneca, Roche, Sanofi, and BMS. In addition, Dr. Rafael Amado was appointed President, Head of Global Research and Development, expanding his role to encompass R&D efforts all of our therapeutic areas upon Dr. Harald Reinhart’s retirement on June 30, 2024.
Previous report
Foreign Currency Losses
Previous report
Other (Expenses) Income, Net
Reworded paragraphs (34)
Previous wording
You should read the following discussion and analysis of our financial condition and results of operations together with our 2023 Annual Report and our unaudited condensed consolidated financial statements and the accompanying notes for the three and six months ended June 30, 2024 included in Item 1. Financial Statements.
Current wording
You should read the following discussion and analysis of our financial condition and results of operations together with our 2023 Annual Report and our unaudited condensed consolidated financial statements and the accompanying notes for the three and nine months ended September 30, 2024 included in Item 1. Financial Statements.
Previous wording
We are a patient-focused, innovative, commercial-stage, global biopharmaceutical company with a substantial presence in both Greater China and the United States. We are focused on discovering, developing, and commercializing products that address medical conditions with significant unmet needs in the areas of oncology, immunology, neuroscience, and infectious disease. We intend to leverage our competencies and resources to positively impact human health in Greater China and worldwide. We currently have five commercial products – ZEJULA®, OPTUNE, QINLOCK®, NUZYRA®, and VYVGART® – that have received marketing approval and that we have commercially launched in one or more territories in Greater China. OPTUNE refers to Tumor Treating Fields devices marketed under various brand names, including OPTUNE GIO® for glioblastoma multiforme (“GBM”). We also have multiple programs in late-stage product development and a number of ongoing pivotal trials across our portfolio.
Current wording
We are a patient-focused, innovative, commercial-stage, global biopharmaceutical company with a substantial presence in both Greater China and the United States. We are focused on discovering, developing, and commercializing products that address medical conditions with significant unmet needs in the areas of oncology, immunology, neuroscience, and infectious disease. We intend to leverage our competencies and resources to positively impact human health in Greater China and worldwide. We currently have five commercial products – ZEJULA®, OPTUNE, QINLOCK®, NUZYRA®, and VYVGART® – that have received marketing approval and that we have commercially launched in one or more territories in Greater China. OPTUNE refers to Tumor Treating Fields devices marketed under various brand names, including OPTUNE GIO® for glioblastoma multiforme (“GBM”). We also have three products that have received marketing approval and are moving toward commercial launch for the approved indications – VYVGART Hytrulo (the subcutaneous formulation of efgartigimod), XACDURO® (SUL-DUR), and AUGTYRO® (repotrectinib) – as well as multiple programs in late-stage product development and a number of ongoing pivotal trials across our portfolio.
Previous wording
Net product revenue was $100.1 million for the second quarter of 2024, an increase of 45% compared to the prior year period, primarily driven by increased sales for VYVGART since its launch in September 2023 and NRDL listing in January 2024 and increased sales for ZEJULA and NUZYRA. The NRDL listing for ZEJULA as a maintenance treatment was renewed in the first quarter of 2024, and ZEJULA continues to be the leading PARP inhibitor in hospital sales for ovarian cancer in mainland China. Increased sales for NUZYRA were supported by the inclusion in the NRDL for its IV formulation in the first quarter of 2023 and for its oral formulation in the first quarter of 2024.
Current wording
Net product revenue was $101.8 million for the third quarter of 2024, an increase of 47% compared to the prior year period, primarily driven by increased sales for VYVGART since its launch in September 2023 and listing on China’s National Reimbursement Drug List (“NRDL”) in January 2024 for the treatment of adult patients with generalized myasthenia gravis (“gMG”)who are anti-acetylcholine receptor (“AChR”) antibody positiveand increased sales for ZEJULA and NUZYRA. The NRDL listing for ZEJULA as a maintenance treatment was renewed in the first quarter of 2024, and ZEJULA continues to be the leading PARP inhibitor in hospital sales for ovarian cancer in mainland China. Increased sales for NUZYRA were supported by the inclusion in the NRDL for its intravenous (“IV”) formulation for the treatment of adult patients with community-acquired bacterial pneumonia (“CABP”) and acute bacterial skin and skin structure infections (“ABSSSI”) in the first quarter of 2023 and for its oral formulation for these indications in the first quarter of 2024.
Previous wording
•Niraparib (PARP): In July 2024, data from a Zai-supported study was published in Cell that provides new insights with potential to improve treatment of HRD-positive ovarian cancers, including through neoadjuvant monotherapy with niraparib and a combination of niraparib and ZL-1218, our investigational CCR8 antibody.
Current wording
•Niraparib: In July 2024, data from a Zai-supported study was published in Cell that provides new insights with potential to improve treatment of HRD-positive ovarian cancers, including through neoadjuvant monotherapy with niraparib and a combination of niraparib and ZL-1218, our investigational CCR8 antibody.
Previous wording
•Efgartigimod: In May 2024, the NMPA accepted for priority review a supplemental Biologics License Application for efgartigimod alfa injection (subcutaneous injection) (“efgartigimod SC”) for the treatment of patients with chronic inflammatory demyelinating polyneuropathy (“CIDP”). In June 2024, our partner argenx announced that the FDA approved efgartigimod SC, under the brand name VYVGART® Hytrulo, for this indication.
Current wording
•Efgartigimod: In July 2024, the NMPA approved the Biologics License Application for efgartigimod alfa injection (subcutaneous injection), under the brand name VYVGART Hytrulo, as an add on to standard therapy for the treatment of adult patients with gMGwho are AChR antibody positive. In November 2024, the NMPA approvedthe supplemental Biologics License Application for VYVGART Hytrulo for the treatment of adult patients with chronic inflammatory demyelinating polyneuropathy.
Previous wording
In July 2024, Zai Lab joined the global Phase III ADEPT-2 study evaluating the safety and efficacy of KarXT for the treatment of Alzheimer’s disease with psychosis in Greater China.
Current wording
◦ADP: In July 2024, we joined the global Phase III ADEPT-2 study evaluating the safety and efficacy of KarXT for the treatment of psychosis associated with Alzheimer’s disease (“ADP”) in Greater China.
Previous wording
Our results of operations have been, and will continue to be, affected by our license and collaboration agreements. In accordance with these agreements, we may be required to make upfront payments and milestone payments upon the achievement of certain development, regulatory, and sales-based milestones for the relevant products as well as certain royalties at tiered percentage rates based on annual net sales of the licensed products in the licensed territories. As of June 30, 2024, we may be required to pay development and regulatory milestone payments of up to an additional aggregate amount of $294.5 million for our current clinical programs and $561.2 million for other programs, and such payments are contingent on the progress of our product candidates prior to commercialization. As of June 30, 2024, we also may be required to pay sales-based milestone payments of up to an additional aggregate amount of $1,980.0 million as well as certain royalties at tiered percentage rates on annual net sales that are contingent on product performance. If these milestones or royalties do occur, we view related payments as favorable because such payments signify that the product or product candidate is achieving higher sales levels or advancing toward potential commercial launch.
Current wording
Our results of operations have been, and will continue to be, affected by our license and collaboration agreements. In accordance with these agreements, we may be required to make upfront payments and milestone payments upon the achievement of certain development, regulatory, and sales-based milestones for the relevant products as well as certain royalties at tiered percentage rates based on annual net sales of the licensed products in the licensed territories. As of September 30, 2024, we may be required to pay development and regulatory milestone payments of up to an additional aggregate amount of $284.5 million for our current clinical programs and $613.0 million for other programs. Such development and regulatory milestone payments are contingent on the progress of our product candidates prior to commercialization, and we see these payments as favorable because they indicate that product candidates are advancing. As of September 30, 2024, we also may be required to pay sales-based milestone payments of up to an additional aggregate amount of $2,295.0 million as well as certain royalties at tiered percentage rates on annual net sales. Such sales-based milestone and royalty payments are contingent on the performance of our commercial products, and we see these payments as favorable because they signify that a product is achieving higher sales levels.
Previous wording
In this section, we discuss our results of operations for the three and six months ended June 30, 2024 compared to the same periods in 2023.
Current wording
In this section, we discuss our results of operations for the three and nine months ended September 30, 2024 compared to the same periods in 2023.
Previous wording
Our net product revenue increased by $31.2 million and $55.6 million in the three and six months ended June 30, 2024, respectively, primarily driven by increased sales for VYVGART since its launch in September 2023 and NRDL listing in January 2024. Net product revenue growth was also supported by increased sales volumes for ZEJULA and NUZYRA in the three and six months ended June 30, 2024 and for QINLOCK in the six months ended June 30, 2024. ZEJULA sales remained strong as it continued to be the leading PARP inhibitor in hospital sales for ovarian cancer in mainland China following the renewal of its NRDL listing as a maintenance treatment in the first quarter of 2024. The growth in NUZYRA sales was supported by the inclusion in the NRDL for its IV formulation in the first quarter of 2023 and for its oral formulation in the first quarter of 2024. Similarly, QINLOCK sales were supported by its inclusion in the NRDL in the first quarter of 2023.
Current wording
Our net product revenue increased by $32.6 million and $88.2 million in the three and nine months ended September 30, 2024, respectively, primarily driven by increased sales for VYVGART since its launch in September 2023 and NRDL listing in January 2024 for the treatment of gMG. Net product revenue growth was also supported by increased sales volumes for ZEJULA and NUZYRA in the three and nine months ended September 30, 2024. ZEJULA sales remained strong as it continued to be the leading PARP inhibitor in hospital sales for ovarian cancer in mainland China. The growth in NUZYRA sales was supported by the inclusion in the NRDL for its IV formulation for the treatment of CABP and ABSSSI in the first quarter of 2023 and for its oral formulation for these indications in the first quarter of 2024.
Previous wording
Cost of product revenue increased by $11.4 million and $23.7 million in the three and six months ended June 30, 2024, respectively, primarily due to increasing sales volumes and shifts in product sales mix.
Current wording
Cost of product revenue increased by $11.1 million and $34.8 million in the three and nine months ended September 30, 2024, respectively, primarily due to increasing sales volumes and shifts in product sales mix.
Previous wording
Collaboration revenue was $0.4 million and cost of collaboration revenue was $0.1 million in both the three and six months ended June 30, 2024, and related to promotional activities in mainland China. We had no such collaboration revenue in the prior year periods.
Current wording
In the three and nine months ended September 30, 2024, collaboration revenue related to promotional activities in mainland China was $0.4 million and $0.8 million, respectively, and cost of collaboration revenue was $0.3 million and $0.4 million, respectively. We had no such collaboration revenue in the prior year periods.
Previous wording
•a decrease of $18.3 million and $19.3 million, respectively, in licensing fees as a result of decreased upfront and milestone payments for our license and collaboration agreements; partially offset by
Current wording
•an increase of $22.6 million in licensing fees in connection with increased upfront and milestone payments for our license and collaboration agreements; partially offset by
Previous wording
•an increase of $1.4 million and $9.2 million, respectively, in CROs/CMOs/Investigators expenses and other costs related to ongoing and newly initiated clinical trials.
Current wording
•a decrease of $10.9 million in CROs/CMOs/Investigators expenses and other costs related to ongoing clinical trials; and
Previous wording
Research and development expenses decreased by $15.1 million and $8.9 million in the three and six months ended June 30, 2024, respectively, primarily due to:
Current wording
Research and development expenses decreased by $1.7 million in the nine months ended September 30, 2024, primarily due to:
Previous wording
Research and development expenses attributable to clinical programs decreased by $4.9 million in the six months ended June 30, 2024 primarily driven by a decrease of $8.3 million in licensing fees, offset by an increase of $3.4 million in CROs/CMOs/Investigators expenses due to newly initiated studies and progress of existing studies. Research and development expenses attributable to pre-clinical programs decreased by $8.1 million in the six months ended June 30, 2024 primarily due to a decrease of $11.0 million in licensing fees, offset by an increase of $2.9 million in CROs/CMOs/Investigators expenses related to newly initiated studies and progress of existing studies.
Current wording
Research and development expenses attributable to clinical programs decreased by $5.0 million in the nine months ended September 30, 2024 primarily driven by a decrease of $7.3 million in CROs/CMOs/Investigators expenses related to the progress of existing studies, offset by an increase of $2.3 million in licensing fees. Research and development expenses attributable to pre-clinical programs increased by $4.4 million in the nine months ended September 30, 2024 primarily due to an increase of $3.4 million in CROs/CMOs/Investigators expenses related to newly initiated studies and progress of existing studies and an increase of $1.0 million in licensing fees.
Previous wording
Selling, general, and administrative expenses increased by $11.8 million and $18.5 million in the three and six months ended June 30, 2024, respectively, primarily due to:
Current wording
Selling, general, and administrative expenses increased by $17.1 million in the nine months ended September 30, 2024, primarily due to:
Previous wording
•an increase of $7.2 million and $13.4 million in other costs, respectively, primarily related to higher general selling expenses for VYVGART which was launched in September 2023.
Current wording
•an increase of $16.0 million in other costs primarily related to higher general selling expenses for VYVGART which was launched in September 2023; and
Previous wording
•an increase of $5.4 million and $10.4 million in personnel compensation and related costs, respectively, primarily driven by headcount growth mainly to support VYVGART; partially offset by
Current wording
•an increase of $5.0 million in personnel compensation and related costs primarily driven by headcount growth related to support VYVGART; partially offset by
Previous wording
•a decrease of $0.8 million and $5.3 million in professional service fees, respectively, primarily related to decreased legal, finance, and human resources administrative expenses.
Current wording
•a decrease of $3.8 million in professional service fees primarily related to decreased finance and human resources administrative expenses.
Previous wording
Interest income decreased by $0.8 million and $1.3 million in the three and six months ended June 30, 2024, respectively, primarily due to decreased cash and cash equivalents.
Current wording
Interest income decreased by $0.1 million and $1.5 million in the three and nine months ended September 30, 2024, respectively, primarily due to decreased cash and cash equivalents.
Previous wording
Interest expense increased by $0.5 million and $0.6 million in the three and six months ended June 30, 2024, respectively, primarily due to interest expense on short-term debt we entered into in the first half year of 2024. We had no such interest expense in the prior year periods.
Current wording
Interest expense increased by $0.7 million and $1.4 million in the three and nine months ended September 30, 2024, respectively, primarily due to interest expense on short-term debt we entered into in 2024. We had no such interest expense in the prior year periods.
Previous wording
Foreign currency losses decreased by $36.0 million and $25.0 million in the three and six months ended June 30, 2024, respectively, due to the decreased level of depreciation of the RMB against the U.S. dollar.
Current wording
Foreign currency gain increased by $9.6 million in the three months ended September 30, 2024, primarily driven by increased remeasurement gain due to appreciation of the RMB against the U.S. dollar.
Previous wording
Other income, net was $0.4 million in the six months ended June 30, 2024, compared to other expenses, net of $0.2 million in the six months ended June 30, 2023, primarily due to an increase of $3.2 million in government grants, an increase of $1.2 million in other miscellaneous gain primarily driven by an increase in sublease rental income, offset by an increase of $3.8 million in loss of our equity investment in MacroGenics, Inc as a result of changes in its stock price.
Current wording
Other income, net increased by $3.0 million and $3.6 million in the three and nine months ended September 30, 2024, respectively, primarily due to an increase of $3.2 million and $6.4 million in government grants, respectively, and an increase of $0.1 million and $1.3 million in other miscellaneous gain primarily driven by an increase in sublease rental income, respectively, partially offset by an increase of $0.3 million and $4.1 million in loss of our equity investment in MacroGenics, Inc. as a result of changes in its stock price, respectively.
Previous wording
Income tax expense was nil in both the three and six months ended June 30, 2024 and 2023.
Current wording
Income tax expense was nil in both the three and nine months ended September 30, 2024 and 2023.
Previous wording
Net loss was $80.3 million in the three months ended June 30, 2024, or a loss per ordinary share attributable to common stockholders of $0.08 (or loss per ADS of $0.82), compared to a net loss of $120.9 million in the three months ended June 30, 2023, or a loss per ordinary share of $0.13 (or loss per ADS of $1.25).
Current wording
Net loss was $41.7 million in the three months ended September 30, 2024, or a loss per ordinary share attributable to common stockholders of $0.04 (or loss per ADS of $0.42), compared to a net loss of $69.2 million in the three months ended September 30, 2023, or a loss per ordinary share of $0.07 (or loss per ADS of $0.71).
Previous wording
Net loss was $133.7 million in the six months ended June 30, 2024, or a loss per ordinary share attributable to common stockholders of $0.14 (or loss per ADS of $1.37), compared to a net loss of $170.0 million in the six months ended June 30, 2023, or a loss per ordinary share of $0.18 (or loss per ADS of $1.77).
Current wording
Net loss was $175.4 million in the nine months ended September 30, 2024, or a loss per ordinary share attributable to common stockholders of $0.18 (or loss per ADS of $1.80), compared to a net loss of $239.2 million in the nine months ended September 30, 2023, or a loss per ordinary share of $0.25 (or loss per ADS of $2.48).
Previous wording
To date, we have financed our activities primarily through private placements, our September 2017 initial public offering and various follow-on offerings on Nasdaq, and our September 2020 secondary listing and initial public offering on the Hong Kong Stock Exchange. In addition, we have raised approximately $164.6 million in private equity financing and approximately $2,462.7 million in net proceeds after deducting underwriting commissions and the offering expenses payable by us in our initial public offering and subsequent follow-on offerings on Nasdaq and our initial public offering on the Hong Kong Stock Exchange. Our operations have consumed substantial amounts of cash since inception. The net cash used in our operating activities was $132.3 million and $128.0 million in the six months ended 2024 and 2023, respectively. For information on our research and development activities and related expenditures see the Research and Development Expenses, Selling, General, and Administrative Expenses, License and Collaboration Arrangements, and Results of Operations sections in above. In addition, as of June 30, 2024, we had commitments for capital expenditures of $1.0 million, mainly for the purpose of plant construction and installation.
Current wording
To date, we have financed our activities primarily through private placements, our September 2017 initial public offering and various follow-on offerings on Nasdaq, and our September 2020 secondary listing and initial public offering on the Hong Kong Stock Exchange. In addition, we have raised approximately $164.6 million in private equity financing and approximately $2,462.7 million in net proceeds after deducting underwriting commissions and the offering expenses payable by us in our initial public offering and subsequent follow-on offerings on Nasdaq and our initial public offering on the Hong Kong Stock Exchange. Our operations have consumed substantial amounts of cash since inception. The net cash used in our operating activities was $159.1 million and $183.3 million in the nine months ended 2024 and 2023, respectively. For information on our research and development activities and related expenditures see the Research and Development Expenses, Selling, General, and Administrative Expenses, License and Collaboration Arrangements, and Results of Operations sections above. In addition, as of September 30, 2024, we had commitments for capital expenditures of $8.6 million mainly for the purpose of commercial manufacturing development, plant construction, and installation.
Previous wording
As of June 30, 2024, we had cash and cash equivalents, current restricted cash, and short-term investments of $730.0 million, which we expect will enable us to meet our cash requirements including the funding of operating expenses, capital expenditures, and debt obligations for at least the next 12 months.
Current wording
As of September 30, 2024, we had cash and cash equivalents, current restricted cash, and short-term investments of $716.1 million, which we expect will enable us to meet our cash requirements including the funding of operating expenses, capital expenditures, and debt obligations for at least the next 12 months.
Previous wording
Although we believe that we have sufficient capital to fund our operations for at least the next twelve months, we may, from time to time, identify opportunities to access capital through debt arrangements on favorable commercial terms. In February 2024, we entered into three such debt arrangements with Chinese financial institutions that allow certain of our subsidiaries to borrow up to approximately $164.5 million (or RMB1,171.7 million) to support our working capital needs in mainland China. As of June 30, 2024, we had short-term debt of approximately $70.3 million (or RMB501.0 million) pursuant to these debt arrangements. In addition, in July 2024, we entered into an additional such debt arrangement with a Chinese financial institution that would allow Zai Lab Shanghai to borrow up to RMB250.0 million (approximately $34.4 million) to support our working capital needs in mainland China. These debt arrangements will provide us with additional capital capacity that gives us enhanced flexibility to execute on our corporate strategic goals. For more information, see Note 9 and Note 16.
Current wording
Although we believe that we have sufficient capital to fund our operations for at least the next twelve months, we may, from time to time, identify opportunities to access capital through debt arrangements on favorable commercial terms. In the nine months ended September 30, 2024, we entered into four such debt arrangements with Chinese financial institutions that allow certain of our subsidiaries to borrow up to approximately $198.9 million (or RMB1,421.7 million) to support our working capital needs in mainland China. As of September 30, 2024, we had short-term debt of approximately $113.0 million (or RMB791.8 million) pursuant to these debt arrangements. These debt arrangements will provide us with additional capital capacity that gives us enhanced flexibility to execute on our corporate strategic goals. For more information, see Note 10.
Previous wording
Net cash used in operating activities increased by $4.3 million in the six months ended June 30, 2024, primarily due to a decrease of $31.4 million in net changes in operating assets and liabilities, a decrease of $9.2 million in adjustments to reconcile net loss to net cash used in operating activities, partially offset by a decrease of $36.3 million in net loss.
Current wording
Net cash used in operating activities decreased by $24.2 million in the nine months ended September 30, 2024, primarily due to a decrease of $63.8 million in net loss, partially offset by a decrease of $23.0 million in adjustments to reconcile net loss to net cash used in operating activities and a decrease of $16.6 million in net changes in operating assets and liabilities.
Previous wording
Net Cash Provided by (Used in) Investing Activities
Current wording
Net Cash Used in Investing Activities
Previous wording
Net cash provided by investing activities was $2.4 million in the six months ended June 30, 2024, compared to net cash used in investing activities of $11.3 million in the six months ended June 30, 2023. This shift was primarily due to a decrease of $100.0 million in purchases of short-term investments, and a decrease of $3.5 million in purchases of property and equipment, partially offset by a decrease of $68.2 million in proceeds from the maturity of short-term investments, an increase of $11.5 million from acquisition of intangible assets as we made a sales-based milestone payment which was capitalized as intangible assets in the fourth quarter of 2023, and a decrease of $10.0 million in proceeds from sale of intellectual property.
Current wording
Net cash used in investing activities increased by $2.2 million in the nine months ended September 30, 2024, primarily due to a decrease of $86.1 million in proceeds from the maturity of short-term investments, an increase of $40.1 million from acquisition of intangible assets due to payments for milestone fees, a decrease of $10.0 million in proceeds from sale of intellectual property, and a decrease of $3.9 million in proceeds from land use right, partially offset by a decrease of $134.0 million in purchases of short-term investments, and a decrease of $3.9 million in purchases of property and equipment.
Previous wording
Net cash provided by financing activities was $69.9 million in the six months ended June 30, 2024, compared to net cash used in financing activities of $5.4 million in the six months ended June 30, 2023. This shift was primarily due to $69.8 million in short-term debt proceeds net of related issuance costs as we entered into certain debt arrangements in the first half of 2024, partially offset by decreases of $7.1 million in taxes paid related to settlement of equity awards and $1.7 million in proceeds from exercises of stock options.
Current wording
Net cash provided by financing activities was $112.1 million in the nine months ended September 30, 2024, compared to net cash used in financing activities of $6.8 million in the nine months ended September 30, 2023. This shift was primarily due to $111.0 million in short-term debt proceeds net of related issuance costs as we entered into certain debt arrangements in the nine months ended September 30, 2024, and a decrease of $8.7 million in taxes paid related to settlement of equity awards, partially offset by a decrease of $0.6 million in proceeds from exercises of stock options and an increase of $0.3 million in repayment of short-term debt.
Previous wording
For more information regarding recently issued accounting standards, see Part II – Item 8. Financial Statements and Supplementary Data – Recent Accounting Pronouncements in our 2023 Annual Report. The Company has not adopted any new accounting standards in the six months ended June 30, 2024.
Current wording
For more information regarding recently issued accounting standards, see Part II – Item 8. Financial Statements and Supplementary Data – Recent Accounting Pronouncements in our 2023 Annual Report. The Company has not adopted any new accounting standards in the nine months ended September 30, 2024.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
•a decrease of $1.7 million in CROs/CMOs/Investigators expenses and other costs related to ongoing clinical trials; partially offset by
Current report — wording carried from elsewhere
•an increase of $2.6 million in other costs primarily related to higher general selling expenses for VYVGART which was launched in September 2023.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
Research and development expenses attributable to clinical programs decreased by $11.1 million in the three months ended June 30, 2024 primarily driven by a decrease of $8.3 million in licensing fees and $2.8 million in CROs/CMOs/Investigators expenses. Research and development expenses attributable to pre-clinical programs decreased by $7.6 million in the three months ended June 30, 2024 primarily due to a decrease of $10.0 million in licensing fees, offset by an increase of $2.4 million in CROs/CMOs/Investigators expenses related to newly initiated studies and progress of existing studies.
Previous report — wording carried elsewhere
Other expenses, net increased by $7.5 million in the three months ended June 30, 2024, primarily due to an increase of $8.3 million in loss of our equity investment in MacroGenics, Inc as a result of changes in its stock price.