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    ZLAB
    Earnings call· Jun 2026(Q2 FY26)

    Zai Lab Q2 FY26 earnings call ZLAB

    Aug 6, 2026 Source

    Executive summary

    Zai Lab Q2 FY26 — Pipeline Advancement and Commercial Profitability

    Zai Lab is transforming into a global biopharmaceutical company, marked by significant pipeline advancements, including its first U.S. regulatory submission expected next year and a U.S. product launch anticipated in 2028. The company reported a commercially profitable quarter with sequential revenue growth, while strategically investing in its innovative global pipeline. Management is focused on disciplined capital allocation and expects operating expenses to remain stable through the remainder of the year.

    Highlights

    5

    • Net product revenue grew 11% sequentially to $105.8 million in Q2 FY26.

    • The commercial business remained profitable.

    • Advanced the DLL3 ADC (zoci) from IND to global pivotal trials in less than 2 years.

    • Expect to have 3 registrational programs underway by year-end 2026.

    • CarXT launch is off to an excellent start, with good momentum ahead of potential NRDL inclusion in 2027.

    Concerns

    3

    • ZEJULA demand, while strong, is impacted by supply constraints.

    • Reported revenue for the VYVGART franchise in H2 FY26 may not fully reflect underlying demand due to timing of NRDL-related commercial dynamics.

    • The company's previous profitability goal by end of 2025 has shifted to 'naturally lead to profitability over time' with global approval in 2028.

    Guidance & targets

    17
    CategoryTargetConfidence
    First U.S. regulatory submission
    Expected
    high materiality
    High
    Zoci U.S. approval
    Anticipated
    high materiality
    Medium
    Commercial business year-on-year growth
    Meaningful growth
    high materiality
    High
    First U.S. product launch
    Potential
    high materiality
    Medium
    Zoci Phase III SCLC enrollment completion
    Expected in H1 2027
    high materiality
    High
    Zoci U.S. accelerated approval submission
    Expected later in 2027
    high materiality
    High
    Zoci Phase III combination trial initiation
    Anticipated in coming months
    medium materiality
    High
    Registrational programs
    3 programs underway
    high materiality
    High
    Zoci + BI T cell engager study initiation
    Expected in coming months
    medium materiality
    High
    ZL-1503 first-in-human data
    Presented in H2 2026
    medium materiality
    High
    ZL-1503 MAD data presentation
    Next year
    medium materiality
    Medium
    ZL-6201 dose escalation enrollment completion and initial data
    Expected in H1 2027
    medium materiality
    High
    ZL-1311 IND submission
    Expected by year-end
    medium materiality
    High
    Operating expenses
    Broadly stable
    medium materiality
    High
    China commercial business growth
    Meaningful growth
    high materiality
    High
    CarXT NRDL inclusion
    Potential
    medium materiality
    Medium
    Local manufacturing for XACDURO and PXD
    On track
    low materiality
    High

    Segment performance

    3
    SegmentRevenueYoYQoQMargin
    Oncology
    ZEJULA sales remained steady, with strong underlying demand despite ongoing supply constraints.
    ZEJULA sales: steadyZEJULA demand: strong despite supply constraints
    		————
    Immunology
    VYVGART volumes experienced strong double-digit sequential growth, though reported revenue in the second half may be affected by NRDL-related commercial dynamics.
    VYVGART volumes: grew double digits sequentiallyVYVGART revenue: may not fully reflect underlying demand in H2 FY26 due to NRDL timing
    		——double digits sequentially—
    Neurology
    CarXT's launch is off to an excellent start, building momentum ahead of potential NRDL inclusion in 2027.
    CarXT launch: excellent startCarXT NRDL inclusion: potential in 2027
    		————

    Operational metrics

    4
    Net product revenue
    $105.8M11% sequential growth
    Q2 FY26

    Company-wide net product revenue for the quarter.

    Cash and investments balance
    $717.5M
    Q2 FY26

    Cash and investments balance at the end of the second quarter, providing financial flexibility.

    Operating expenses
    Broadly stable
    H2 FY26

    Expected trend for operating expenses through the remainder of the year, reflecting disciplined capital allocation.

    Local manufacturing status
    On track
    Ongoing

    Local manufacturing for XACDURO and PXD is progressing as planned, expected to improve profitability.

    Industry KPIs

    1
    MetricValueDetails
    Clinical trial efficacy safety data38.2%%

    Deals & partnerships

    2
    AmgenCollaboration to combine zoci with T cell engagers (IMDELTRA and Imfinzi) in a global Phase Ib study.

    A global Phase Ib study with Amgen is already enrolling, including a cohort of untreated small cell lung cancer patients on a triple combination of zoci, IMDELTRA and Imfinzi.

    Boehringer IngelheimCollaboration to combine zoci with a T cell engager in a global Phase Ib/II study for neuroendocrine carcinoma.

    The global Phase Ib/II study with Boehringer Ingelheim in neuroendocrine carcinoma is expected to initiate in the coming months.

    Risks & headwinds

    5
    ZEJULA supply constraintsQ2 FY26

    Demand remains strong despite supply constraints

    NRDL inclusion timing for VYVGARTH2 FY26

    Reported revenue in H2 FY26 may not fully reflect underlying demand

    Mitigation: Preparing for gradual transition from IV to subcu and seeking NRDL inclusion for VYVGART Hytrulo.

    Delay in profitability goalBeyond FY25

    Previously guided to profitability by end of 2025, now 'naturally lead to profitability over time' with global approval in 2028.

    Mitigation: Investing with discipline behind innovation, growing revenue with potential global approval in 2028, improving margin, and driving operating efficiencies.

    Competitive atopic dermatitis landscapeOngoing

    Increasingly competitive

    Mitigation: ZL-1503 designed for robust skin clearance, rapid/durable reduction, and longer dosing interval; moving program forward rapidly.

    T-cell engager toxicity (Cytokine Release Syndrome)Ongoing

    CRS is the 'heel of these products'

    Mitigation: ZL-1311 engineered to be biparatopic with balanced CD3 on/off rate to ameliorate CRS.

    What to watch in Q3 FY26

    5

    Zoci Phase III SCLC enrollment completion

    H1 FY27
    CurrentOngoing
    TargetEnrollment completed

    Why it matters

    This is a key milestone for the global registrational trial, paving the way for U.S. accelerated approval submission and subsequent approval.

    Our global registration Phase III in second-line plus small cell lung cancer is expected to complete enrollment in the first half of 2027

    Q&A highlights

    5

    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

    2 min read6 chapters

    Detailed Narrative

    01

    Transformation to Global Biopharma

    Zai Lab is undergoing a significant evolution from a regional business to a global biopharmaceutical company, leveraging its R&D capabilities to develop innovative medicines for patients worldwide. This transformation includes conducting global multi-center registrational oncology trials and advancing preclinical pipelines into INDs this year. The company anticipates its first U.S. regulatory submission in 2027 and a potential first U.S. product launch in 2028, signaling a shift towards global market presence.

    02

    Zoci (DLL3 ADC) Progress

    Zoci, a DLL3-targeted ADC, is showing a potential best-in-class profile in small cell lung cancer (SCLC) and neuroendocrine carcinomas, with strong responses including control of brain metastases. The global registrational Phase III SCLC trial is expected to complete enrollment in H1 2027, leading to a U.S. accelerated approval submission later that year and anticipated approval in 2028. Additionally, Zai Lab is initiating a Phase III combination strategy with immunotherapy for first-line SCLC and collaborating with Amgen and Boehringer Ingelheim on T-cell engager combinations.

    03

    ZL-1503 (Atopic Dermatitis) Development

    ZL-1503, a long-acting humanized IgG1 bispecific antibody targeting IL-13 and IL-31, is advancing rapidly for moderate to severe atopic dermatitis. Designed for robust skin clearance, rapid and durable pruritus reduction, and less frequent dosing, it aims to address significant unmet needs. First-in-human data in healthy volunteers, including PK, PD biomarkers, safety, and immunogenicity, is expected in H2 2026, with Multiple Ascending Dose (MAD) data in AD patients to be presented in 2027.

    04

    Early-Stage Pipeline Advancements

    Beyond its lead assets, Zai Lab is progressing other global programs. ZL-6201, an internally discovered LRRC15 targeting ADC, is actively enrolling patients in a global Phase I study, with initial data from the dose escalation portion expected in H1 2027. Furthermore, the company plans to submit an IND for ZL-1311, a next-generation MUC17 T-cell engager for gastrointestinal cancers, by year-end 2026, highlighting its commitment to expanding its innovative pipeline.

    05

    Commercial Business Performance and Outlook

    In Q2 FY26, net product revenue increased 11% sequentially to $105.8 million, maintaining commercial profitability. Key brands like VYVGART saw double-digit sequential volume growth, and CarXT's launch is off to an excellent start. While H2 FY26 revenue may be affected by NRDL dynamics for VYVGART, Zai Lab anticipates a return to meaningful year-on-year growth in 2027, driven by new product launches and potential NRDL inclusions.

    06

    Financial Discipline and Capital Allocation

    Zai Lab ended the quarter with a strong cash balance of $717.5 million, providing financial flexibility. The company is focused on disciplined capital allocation, prioritizing high-value programs and improving productivity through organizational streamlining and AI adoption across various functions. Operating expenses are expected to remain broadly stable through the remainder of 2026, supporting sustained investment in innovation while managing costs.

    AI-generated summary of the company’s earnings call. Not investment advice.