... Hey, hey, everyone. Welcome to our next session with Zai Lab. My name is Li Watsek, a biotech analyst here at Cantor, and it's my great pleasure to have Josh Smiley, President and Chief Operating Officer, joining me today for the fireside chat. Great to have you, Josh. I think Zai Lab is one of the names that, you know, we internally believe have very strong, you know, fundamentals. You guys gonna, you know, have cash flow positivity by the end of the year. You have a very exciting pipeline. So we're gonna talk a lot about that, you know, today. But before that, maybe I'll hand it over to you to give us some quick intro. Sure, yeah. Yeah, so, you know, Zai Lab, we've been around for 10 years. So we've got two key parts of our business. We've got a big, robust commercial business in China, where we partner with Western biotechs that don't otherwise have development or commercial capabilities in China and have built a portfolio of more than 10, you know, great products or products on the way, including ZEJULA and VYVGART. Those kind of products will drive profitability by Q4 of this year. The second part of our business, then, is our global pipeline, and we've got an emerging clinical pipeline. Our lead asset is a DLL3-targeted ADC for small cell lung cancer. We're gonna start a registration trial geared towards accelerated approval here, in the accelerated approval in the U.S. It'll be a global trial, but that'll start imminently. We're really excited about both the growth in the business in China, but also, you know, increasingly about an opportunity to have sales and products in the U.S. as early as late 2027. Okay, great. So I guess we got this question, you know, from investors. You set a pretty, you know, big goal. You know, by 2028, you're gonna get to that $2 billion, you know, sales. That's about three to four times of what you guys gonna do maybe this year. Yeah. So help us understand what assumptions sort of go into that and just, you know, how confident that you guys can get there. Yeah. So yeah, two years ago, we laid out a five-year sort of vision for the company, and that said that by 2028, we'd have $2 billion in sales. Last year, we had just about $400 million. This year, our guidance says we'll be at about $560 million. So yeah, so considerable growth from here. But I think if you look at where we are with our portfolio in China, VYVGART, which of course is a multi-billion-dollar product on a global basis, we launched with NRDL reimbursement last year. So we're into our second year of launch in myasthenia gravis. It's, you know, it's growing well, and we'd expect by 2028, that product to be trending towards $1 billion in annual sales. If you look at myasthenia gravis in China, there's about 180,000 patients so far. You know, by the end of this year, we probably will have a chance to have had 20,000 patients or so, exposed to VYVGART, but we have opportunities again to much more broadly penetrate that market and get patients to get the full benefits of VYVGART, which is like five cycles over the course of a calendar year. So I think in myasthenia gravis alone, Li, by 2028, we should be, you know, trending in the $500 million and above range from what was last year, about ninety-four million dollars. So I think, you know, significant growth there. We also will have new indications. We participate in all the global programs with our Argenx, and we'll have, you know, by 2028, probably three or more additional indications for this product. So that's the number one growth driver for us. Second will be COBENFY. So we, you know, we partnered with Karuna when it was still Karuna on the product for schizophrenia. Now it's owned by Bristol Myers, so they're our partner, but we have full rights in China. We had to do some additional bridging work in China. We submitted that data at the end of last year. We'd expect an approval in early 2026, hopefully, even a little bit sooner than that. This is a very big opportunity in China. There's eight million patients with schizophrenia, about half of whom, about four million of whom are in some kind of intensive inpatient or quasi-inpatient care. So we'll have a few years of launch and opportunity to promote that product. Again, I think over time, this is also one of those ones that can be in a billion-dollar type of range, and by 2028, we'll at least have, you know, three years of commercialization activities. ZEJULA is our, actually our biggest product today, so a PARP inhibitor for ovarian cancer. We've got patent protection through 2029, so we'd expect that product to continue to contribute meaningfully by that period. We've launched a couple other products this year, including XACDURO, which is a product for antibiotic-resistant infections in that that are hospital-acquired. This is a significant challenge in China. There's a lot greater rate of antibiotic resistance, and there's, you know, more exposure to pathogens in hospitals. We expect this product by 2028 to be, you know, trending in the multiple hundreds of millions of dollars versus what will be tens of millions of dollars this year in terms of launch. TIVDAK will come in soon for cervical cancer. It'll fit directly into our women's cancer portfolio with, you know, to complement ZEJULA, so it should be a meaningful contributor, and then we've got a couple other, I think, you know, exciting products that should hit in China by then, and I'll talk about the global portfolio, the biggest of which would be POVI, our APRIL BAFF inhibitor that we're partnered with Vertex on for IgAN. This is a very big opportunity in China. Probably more than a million patients, you know, could benefit from this type of product. We'll have data available in the first half of next year. If that data is positive, we should be able to move towards a submission and have at least, you know, two years or so of contribution there. You know, start to stack those. That's how you get, you know, on your way to $2 billion. I think the other piece then is we do expect an approval in the U.S. for our DLL3 ADC as early as late 2027 or, you know, sometime in 2028. Of course, as you know, in the U.S., you can get off to a much faster start than China. I mean, China's got huge population, we've got great drugs, but there's sort of a sequence where you get approval, and then you have to go through an NRDL listing, and that can take up to a year or so in the U.S. You know, with a drug that provides a meaningful benefit to patients with small cell lung cancer, you know, you can generate, you know, meaningful sales pretty quickly. So we're excited about that opportunity as well. Yeah. So certainly a lot of, you know, products on the horizon that should be very exciting. So I wanna maybe just touch on the BEMA news. Yeah. Yesterday we saw from, you know, Amgen, looks like the OS, especially the final OS, benefit is attenuated. I understand there's not much, you know, you guys can share at this point. B ecause we still have to see the data, but what can you tell us? Tell investors what the implication might be- Yeah ... for BEMA in gastric cancer? Yeah, so just to remind everybody, so we participate with Amgen in the bemarituzumab first-line gastric cancer program. There are two studies. One was BEMA in combination with chemo versus chemo. That was Fortitude-101, and that's an important study in China because the standard of care for first-line gastric cancer is chemo. That study hit on a pre-specified interim analysis, hit on overall survival, and we, you know, we announced that over the just, I guess, about a month and a half or so ago, that it hit on statistically significant on overall survival and clinically meaningful. In the final analysis, and this was disclosed by Amgen yesterday in a conference, separate conference, they announced that in the final analysis, that benefit had eroded the overall survival benefit. So I think and that they would present the full data at a major medical meeting later this year. So I think given the proximity to the major medical meeting, we're not in a position to talk much about that data. We'll have to wait to see that. But given this, you know, the, this new information, we will wait for the second study, which is BEMA in combination with both chemo and a PD-1 versus chemo and PD-1. That data will be available. That study will complete either at the end of this year or early next year. So given the proximity to that, we'll wait and look at all that data together and then move forward with our submission strategy. So I can't really comment on the, you know, the data itself, but we can certainly say that we've changed our approach, which is, we'll look at the data together and move forward with the strategy from there, versus a one-off submission on 101. So I think at the very least, we're looking at some delay versus, you know, where we would've liked to be, and that delay is, you know, probably in the six-month range. And then, of course, we have to look and understand the data. Again, I think investors will have a chance to see that at least as it relates to 101, have a chance to see that data, both the interim where we hit on the survival the primary analysis, as well as then the final six months data. Those sets will be presented at an upcoming medical meeting. Does that impact your, you know, 2028 $2 billion? BEMA was one of you know, when we have over the course of the last two years, you know, since we put out that guidance, we've said we have three really big products. Of course, we have more than that. I just talked about a bunch. But, you know, they're VYVGART, COBENFY, for schizophrenia, and bemarituzumab for gastric cancer. The opportunity in gastric cancer in China is quite significant relative to the West. But I think in terms of sequence, BEMA was always gonna be the third. So I think in terms of the 2028 impact, it's relatively, you know, again, a six-month delay at the best case. You know, it's probably not a huge impact on that number. I think long-term, of course, we're, you know, we see this as a very important product, but probably the majority of the sales were gonna be in the, you know, the latter part of the decade anyway. Yeah, we'll come back to that a little bit later. Okay. But, you know, starting with, you know, VYVGART, obviously coming out of Q2, we saw some seasonality, some inventory dynamic. But you guys have been, you know, very confident going into the second half of this year. You're gonna see very nice, you know, growth. And we're, you know, well into Q3. Yeah. So I wanna, you know, just wonder, what have you seen in terms of the growth trends, and what are some of the tailwinds here that, you know, we should keep in mind? Yeah. So I think when we think about the VYVGART overall and gMG, you know, we think about a couple things: getting new patients prescribed, and as I mentioned, we've had to date about 18,000 or so, you know, patients. We'll be somewhere above 20,000 by the end of the year. But we look at new patients being prescribed 'cause it's such a big patient population, and then those patients staying on therapy, right? So in the clinical trials for gMG, the benefits, you know, the full benefits were at five courses or cycles of therapy per year, and that's, you know, for our NRDL pricing, that's about $32,000. So that's what a patient, if they take a full five cycles in a year, it's $32,000. What we saw, you know, at launch is patients weren't getting five cycles initially for a couple reasons. One is, many patients were being prescribed, VYVGART in an acute setting. So they were in the hospital because they were having a flare. VYVGART works, you know, wonderfully there. It, you know, reduces the symptoms, and you can leave the hospital. But the real benefits are to prevent relapses and to keep patients out of the hospital and back at work and things like that. So, I think, you know, we, we've consistently seen new patients come in, and, you know, somewhere in the range of about a thousand a month. But, what we need those patients to do is be, you know, increasingly diagnosed and prescribed in what we would call a maintenance setting. So they have the discussion with their physicians. They say, "You use VYVGART, you're gonna use it for a course of therapy, which is about a month. Gonna take about six to eight weeks off, and then come back in for the next," and so on and so on. And that's a pretty, you know, detailed discussion with the physician, I mean, with the patients. If we look at, like, this time last year, of those thousand patients on average a month that were getting started, probably only about a third were started in that kind of, you know, with that kind of dynamic. The other two-thirds were getting it because, again, they were having a flare, or they were, you know, really suffering, and they weren't going through that full sort of expectation around a maintenance therapy. That sort of switched now this year, where about two-thirds of the patients are being prescribed in a true maintenance setting, with the expectation that they're gonna take these cycles. So I think underlying data looks good there. There's a big benefit, though, that we're seeing, that will start to inflect in terms of sales and patient utilization and otherwise, and that is in the middle of July this year, the national treatment guidelines for gMG were updated in China. The prior guidelines positioned VYVGART as kind of a rescue therapy, so as a, you know, short-term agent to knock down symptoms. In the new guidelines, VYVGART is positioned as it is in the label, which is to really focus on long-term maintenance use, to get patients back to minimal symptom expression, so that they can work and have the normal, you know, activities of daily living, social life, and otherwise. That's a big change. And I think we know from markets all around the world, not just China, but when you have new therapies, you know, groundbreaking therapies like VYVGART, guidelines matter, right? So I think this is important. We're starting to see the benefits here. So not only is VYVGART positioned as a frontline therapy for patients, it's also, there's an emphasis on getting patients to three cycles per year to get the benefits of what's called consolidation therapy, and then to take a break, and, you know, to continue on with five or whatever, you know, makes sense over the longer period of time. But I think that's really important, too. So we are seeing the benefits of those guidelines in daily practice today. You're not gonna... I mean, we're gonna have to squint to see the sales impact of that in the third quarter because, again, these guidelines were just published in the middle of July. But we're seeing those benefits, and I think those benefits will start to really show up in Q4. So we'll continue to get, you know, lots of new patients started on the drug. They'll increasingly be started with the expectation that they're coming back in for courses of therapy, and the guidelines play a big role there. All of that, I think, again, will start to really show up in fourth quarter sales. And then for 2026, we will add Hytrulo, which is the subcutaneous version of VYVGART. That'll be added to the NRDL. Today, only the IV form is approved, and that means that every, you know, once a week, if you're in a cycle, once a week, you've got to go into a hospital, get an IV, and in China, patients with gMG tend to travel pretty good distances to see their physicians. So the logistics of every week having to go in to get an IV are, you know, they provide some barriers that we don't see in the U.S. to the same degree today. So getting Hytrulo on in 2026, I think, will be another sort of an inflection point in terms of, you know, once patients are started on VYVGART, to get them back in for the third, fourth, and fifth cycles. Okay, great. Yes, sorry, I can. You're saying you are consistently seeing 1,000 new patients- Yeah ... now, right now? Yeah, yeah. My question is, what kind of new patient last year you are seeing? So we actually were getting about. I mean, as we got into the second half of last year, when I say a thousand, you know, we're in the, like, nine hundred to a thousand sort of range. We've been pretty consistent on that number, but the makeup of those patients has changed considerably. So, again, what we're seeing now is the majority of those patients are being prescribed VYVGART in a maintenance setting versus in an acute setting. And, you know, again, just to give you a sense, if we can get 10% of patients y ou know, at any given time on VYVGART, you know. So if we can get these patients to come back into the office, which they increasingly are, you know, on a quarterly basis, that's in itself worth, you know, somewhere close to $100 million. So again, our challenge is continue to get new patients started, but more importantly, I think the growth is gonna come from getting those patients back into the office and the cycles and otherwise over time. And if we can do that in a meaningful way, which we're starting to see in the data, again, I think there's, you know, no doubt that, you know, in twenty twenty-eight you're gonna see significant, you know, sales coming from gMG alone. Yeah, so for two thousand and twenty-five- Yeah ... two-thirds of the patients are already on the maintenance. If we look at our current month, about two-thirds of patients are being prescribed in some kind of maintenance setting, versus last year at this time, it would've been, like, one-third, only about one-third, yes. ... So, how should we think about our NRDL, you know, price reset? Yeah. You guys had that, you know, earlier this year. When are we going to hear about, you know, the decision? And then just longer-term, you know, every two years you have to do the process. So in terms of, you know, pricing stability- Yeah ... how should we think about that? Yeah, so we're coming up on- Yeah ... the two-year renegotiation. And, you know, we've said we think we're eligible for... I mean, we think it's probably a favorable dynamic to pursue what's called simplified renewal. This is a new process that was introduced in the last cycle, which gives manufacturers the option to follow an algorithm for the price reduction. That algorithm, it basically just looks at what were the projections, the health, economic, and budget projections from the price setting initial price setting mechanism. And if you're relatively close to those projections, there's a grid that you follow and you know leads anywhere from a 0% price reduction to 25%, I think is at the high end. And we think we're in the sort of single-digit, you know, sort of reduction part of that. That would hold for two years. Now, that's, you know, that plays out for IV specifically. We also want to get Hytrulo, you know, added, so, you know, there's a sort of separate negotiation associated with that. But I think altogether, you know, our expectation is. You know, this isn't a guarantee. We're still going through the process and otherwise, but leveraging sort of that simplified renewal process and getting Hytrulo added, our view is that, you know, we should be able to manage that at what will be the equivalent of a, you know, sort of annual single-digit kind of price decline over, you know, over the preceding period. So I think we're, you know, we'll be happy if we can, you know, sort of manage that in that way. If we can get Hytrulo added and, you know, a reasonable, you know, price adjustment, that'll hold for two years, you know. And then in the next cycle, the simplified renewal process is even better. I mean, as you go over time, the calculated reductions are cut in half, basically. This is probably the most important as it relates to getting Hytrulo on, which Hytrulo, of course, is the formulation for all of the new indications as well. Getting that on and getting the base IV price at a reasonable, you know, reduction, I think is, you know, we'll be quite happy with that, and that would fit really well into our, you know, long-term projections. In terms of timing, Lee, though, I think, you know, we don't know anything different than what we've seen the last few cycles, which is probably December, when the NRDL press conference will happen, where they'll announce how many new drugs have been added, what the average price reductions have been, and those kind of things. And then once that happens, then we can begin to disclose, you know, the actual pricing, and otherwise we can't disclose anything until then. So, you know, that timing could change. It's, you know, moved around a little bit over the last, you know, six or seven years or so. But based on the last two cycles, early December press conference, and then, you know, sometime thereafter, we can talk about where we come out. Of course, the net pricing is effective for January 1st of 2026. Okay. Maybe just follow up on our earlier conversation about bema or trastuzumab. So I guess for the first phase 3 trial, we will see data this year, and the second trial, which is testing the triplet- Yeah ... it seems like the timeline has been pushed out a little bit. I think before it was end of the year, but now it seems like it could be coming this year and could be first half of next year. So I guess the first question is: Was that driven by the event rate? And then the second is just, you know, what level of OS benefit that you guys believe you will need to get to that, you know, one billion-plus- Yeah, yeah ... revenue in China? Yeah. So I think first, in terms of the timing, I think Amgen's been a little more specific recently, and they've said it's either end of the year or Q1 of next year, and I think that's just driven by event rates. Okay. You know what they've learned in terms of time from event rate to final analysis and otherwise. It's, you know, I think it's within a, you know, probably a four-month, you know, sort of window here. I think, you know, from what we've thought about overall, again, both in terms of what's, you know, meaningful in trials, but what's more important, what's meaningful in clinical practice. I think, you know, in the first line setting, these patients, you know, they don't do well overall, right? I mean, with gastric cancer. I think, you know, certainly a few months' survival benefit is, you know, commercially viable and would be important. I think what we saw from phase 2 was a much more significant benefit there. So again, we have to see all the data and otherwise, but I think, you know, a few months would be enough to make this a meaningful product in China. But again, we have to wait and see the data and otherwise. And I think, you know, again, we were quite focused on 10-101. B ecause that is the standard of care in China today. But I think what we've seen in other, you know, oncology settings is PD-1s tend to they just tend to, you know, move a little bit slower in China. For some, in some cases, just diffusion of technology just takes a while, but in other cases, because of the different mutations and otherwise, in China, there's been a little bit slower uptake on PD-1s in some of the cancers, but I think over time, the expectation is, you know, we would want, you know, good data from the, the one or two study anyway, because I think over time, that'll be an important comparison. So I think waiting to see all this data together in itself is not, you know, not a terrible thing. We'd like to see data from both studies anyway. But again, I think a modest overall survival benefit is, you know, for these patients, would be meaningful and certainly would be meaningful commercially. I think one thing investors are also trying to, you know, better understand is the ocular toxicities. Yeah. And just given, you know, you being, you know, pretty, you know, hearing from physicians in China just how big of a problem that is. Yeah. Yeah, I think, again- Yeah ... of course, in any of these things, you're looking at risk-benefit, right? So, I think to the extent that you're seeing real overall survival benefit, you know, that persists, right? In these studies, the ocular tox in China appears to be manageable, okay? So I think, you know, if you look in the one oh one study, where we did have, you know, a good chance to look at the data in the primary analysis, the ocular tox tended to be, you know, modest and reversible, and in many cases, could be treated prophylactically 'cause it takes some time to show up. So, you know, mostly it with things like blurry vision. I mean, we didn't see, you know, the more serious adverse events like, you know, retinal detachments and things like that. So it tend to be, you know, sort of visual acuity, blurry vision, and that can be treated both prophylactically or can be treated with dose reductions. Well, I think I didn't have any patients who had to totally stop, you know, stop study drug to because of the adverse event. So it's, you know, modest and reversible and manageable. So I think that piece, we felt like was, you know, certainly from a clinical practice and commercial perspective, was, you know, was manageable over time. Again, that has to be balanced with what kind of, you know, benefits, you know, clinical benefits you're seeing as well. Okay. And then switching to DLL3 ADC, I think this is an asset, you know, has generated a lot of investor interest. I think one challenge here is, obviously, you guys have shown great data at ASCO. I mean, very, very strong, you know, response rate and great activity in the brain mets. But, you know, we're also seeing more competitors entering, you know, small cell lung cancer, not only in DLL3 but other antigens, B7-H3 and SEZ6. I mean, So I guess for investors, they struggle a little bit- Yeah ... and particularly at World Lung this weekend, we're gonna see some, you know, data updates from some of the players here. So how are you thinking about, number one, position of, you know, 1310? Okay. And the second is: How do you view the second line small cell lung cancer opportunity and, you know, potentially in front line? Right. So yeah, the first thing that's right in front of us is the second line- Yeah ... opportunity. We're gonna start the registration trial. We've got alignment with, you know, FDA and otherwise on the key components of the trial. We'll start that, we've said in the second half of this year, so imminently. And that will be geared for both, you know, a full approval on a global basis, but also, on a subset of patients, an accelerated approval, as I say, as early as, you know, Q4 of 2027. So somewhere in that time frame. That clearly puts us, you know, somewhere in the range of, like, two years ahead of any of the other DLL3 ADCs. But I think probably more importantly, in terms of the opportunity, I guess if you look at Imdeltra today, and if you look in the Q2 Amgen results, I think just taking the Q2 sales, which are, I think, almost all in the U.S., right? And in the late line or second line plus settings, I think they're already annualizing to, like, $600 million Yeah ... sales, and that's in less than two years, you know, from approval, from accelerated approval. Our view, you know, based on investigators and practicing physicians in small cell lung cancer that we talked to, is somewhere less than 20% of patients, you know, can get Imdeltra because, you know, it requires inpatient monitoring in the first, you know, few doses. There's concerns about, you know, CRS, that's why the and ICAN, that's why the monitoring takes place. So if you think about less than 20% of patients and, you know, early in the launch and $600 million of sales, you know, we certainly see, you know, there's an area here, you know, a TAM of $2 billion or more in the US for second line and later small cell lung cancer. Our data, we believe, will, you know, in this setting, will certainly be compelling, and that's why FDA is aligned around an accelerated approval path. So I think there's. You know, I mean, I don't think you need to make, you know, super aggressive assumptions, to get to, in the second line setting, to get to something over $1 billion in annual sales, and that takes into account the fact that Imdeltra will be an important, you know, option. B7-H3's, you know, probably will come in with an approval, and that there may be multiple, you know, DLL3 ADCs, but it's a, it's a big space. I think then, as you think about first line, we're doing the dosing work now in the first line setting. It'll be available by the end of this year and early next year. We're looking at both our DLL3 in combination with a PD-1, as well as in a triplet with chemo as well, and I think we'll look at that data, and we'll be in a position to start a first line trial sometime in the middle, you know, middle to second half of next year. Again, I think here, you know, particularly in the first line setting, there are gonna be multiple opportunities for combinations and sequencing and otherwise. So, you know, I think frankly, in this space, having multiple mechanisms and otherwise is probably good. Patients will benefit. They'll live longer. They'll have opportunities to, you know, to try different combinations as they progress, so you know, I think there's a you know, probably double the size of the opportunity in first line relative to second line, but clearly, there's a you know, this is an exciting space on a global basis, but clearly in the U.S., and I think we're you know, we're not you know, we're not scared of the competition here. Again, in some cases, I think we're confident in the data that we have and in other cases, we're also confident that you know, if you look at other tumors where you start to get more mechanisms in place, it tends to grow the pie, not you know, not slice it you know, more thinly. Okay, great. Thank you so much, Josh. Okay. We're out of time. Okay, thank you. Yeah, thank you. No, thanks. Thanks, everybody, and thanks. Good conference. Thank you for having us.