Zai Lab (ZLAB) Q2 FY26 earnings call: guidance and Q&A

What to expect from the ESMO presentation on Zoci + IO +/- chemo in first-line SCLC, including data size, scope, and win scenario?

Rafael Amado stated that approximately 60 patients' data would be presented at ESMO, primarily from the doublet with a checkpoint inhibitor at 1.6 mg/kg, with a median follow-up of 8-9 months. He indicated that a win scenario would involve an ~80% response rate and a 50% increase in median PFS compared to the benchmark of 60-70% response rate and 5 months PFS.

“I think the benchmark with the checkpoint inhibitor studies have shown responses in the 60% to 70% with chemotherapy and median follow-up -- sorry, progression-free survival of about 5 months. So 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.”

asked by Anupam Rama · answered by Rafael Amado

How should investors think about the company's profitability goal, previously guided for end of 2025, and what differentiates ZL-1503 in the competitive atopic dermatitis landscape?

Yajing Chen clarified that while the commercial business is already profitable and local manufacturing will improve it, the company is prioritizing investments in global competitive programs for long-term value. Profitability will naturally follow over time, especially with potential global approvals in 2028. Rafael Amado highlighted ZL-1503's differentiation through robust skin clearance, brisk pruritus reduction by inhibiting the IL-31 receptor, and an extended dosing interval due to YTE modification, expecting superiority over current standards.

“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 revenue with our potential global approval in 2028, which will improve margin and drive operating efficiencies across the organization at the same time. So we believe those factors adding together will naturally lead to the profitability over time and continue to improve the profitability over time as well.”

asked by Kaiyue Yang · answered by Yajing Chen

What is the potential dosing profile for ZL-1503, how will upcoming data inform it, and what are the key metrics and evolution for the China business?

Rafael Amado explained that healthy volunteer data (single IV injection, 6 cohorts, 4 doses) will inform tolerability, PK (half-life), and biomarkers including immunogenicity. MAD data will follow. He expects a short induction followed by longer maintenance dosing, but it's premature to specify the actual dose. Shan Hu stated the China commercial focus is on ZEJULA (return to growth), VYVGART (continued volume growth), and CarXT (launch excellence), with new patient starts as a critical metric. He expects stabilization in the upcoming quarter and meaningful growth in 2027, alongside NRDL negotiations.

“In the healthy volunteers data, it's a single IV injection, and we have 6 cohorts. We're testing 4 doses... 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 antidrug antibodies.”

asked by Li Wang Watsek · answered by Rafael Amado

What aspects of ZL-1311's preclinical profile give confidence it can overcome historical challenges of T-cell engagers in solid tumors?

Rafael Amado highlighted that ZL-1311, a MUC17 T-cell engager for GI tumors, is engineered to be biparatopic for higher avidity and has a balanced CD3 on/off rate to ameliorate cytokine release syndrome (CRS), a common toxicity. Preclinically, it shows promising properties compared to competitors, with the goal of enabling community administration eventually.

“It is engineered to be biparatopic. So it targets more than one epitope. So hopefully, the ability will be higher. But the CD3 is balanced by higher on and off rate. And we believe that, that hopefully, in the clinic will ameliorate cytokine release syndrome, which is really the heel of these products and that they need to be given in the hospital because of the emergence of CRS.”

asked by Unknown Analyst · answered by Rafael Amado

What is the mechanistic and biological value of combining Zoci (DLL3 ADC) with a DLL3 T-cell engager, compared to a B7-H3 ADC combination?

Rafael Amado explained that the mechanisms are orthogonal: Zoci (ADC) debulks tumors, liberating neoantigens, while T-cells eliminate residual disease and maintain immune surveillance. The epitopes for Zoci and Amgen's Idelta are different, allowing both to bind to the same cell. He emphasized DLL3 as a safer, more tumor-specific target than B7-H3, which is present in normal tissues like lung epithelium and carries a higher risk of toxicity, especially lung toxicity (ILD) with ADCs.

“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 the tumor cells, it liberates other antigens that are neoantigens.”

asked by Dana Graybosch · answered by Rafael Amado