Zai Lab NASDAQ: ZLAB reported a year-over-year decline in first-quarter 2026 product revenue as pressure on ZEJULA weighed on results, while management emphasized progress across its global oncology and immunology pipeline and pointed to multiple upcoming regulatory and clinical milestones.
On the company’s earnings call, Founder, Chairperson and CEO Samantha Du said Zai Lab is at “a pivotal moment,” citing the company’s investment in a fully integrated research and development platform and its move toward global registrational studies. Du said the company expects to submit its first global biologics license application to the U.S. Food and Drug Administration in late 2027, tied to its lead asset zoci.
“Our pipeline is expanding, our global assets are generating meaningful data, and our lead asset is in global pivotal stage,” Du said. She added that Zai Lab is using artificial intelligence and data-driven approaches across the organization to improve speed, precision and efficiency.
First-quarter revenue falls as ZEJULA faces pressure
Chief Financial Officer Yajing Chen said total product revenue in the first quarter declined 6% year over year to $99.6 million. She said the decline was driven by lower ZEJULA sales, partially offset by continued growth from ZEJULA and NUZYRA, as stated on the call.
Chen said Zai Lab expects total product revenue to improve sequentially over the next nine months as demand builds, but the company anticipates “near-term pressure” for full-year 2026 product revenue and a return to growth in 2027.
Research and development expenses rose 8% year over year in the quarter, driven by increased license fees and clinical trial-related expenses, partially offset by lower personnel compensation expenses tied to resource prioritization and efficiency efforts. Selling, general and administrative expenses increased slightly, mainly due to higher general selling expenses. Loss from operations increased 23% to $69.4 million.
Zai Lab ended the quarter with $761.3 million in cash. Chen said the company’s regional business is commercially profitable and that management remains focused on strengthening the regional business, advancing the global pipeline and deploying capital thoughtfully.
Commercial trends mixed across portfolio
President and Chief Operating Officer Josh Smiley said first-quarter performance reflected Chinese New Year seasonality and product-specific dynamics.
For ZEJULA, Smiley said results were hurt by changes in hospital utilization patterns following volume-based procurement for generic olaparib, along with incremental competitive pressure in the PARP inhibitor class. He said ZEJULA’s first-line positioning remains intact, supported by its label advantage, and that the company is working to stabilize and drive demand.
For VYVGART, Smiley said physician confidence remains strong and the product’s share within biologics is stable. He said Zai Lab delivered double-digit year-over-year volume growth in the quarter, offset by a 12% price discount related to National Reimbursement Drug List renewal. He said biologic penetration in the generalized myasthenia gravis maintenance setting remains around 15%, suggesting additional room for growth.
XACDURO saw strong patient demand and expanding hospital adoption, but performance was constrained by supply, Smiley said. He added that supply constraints may persist through the remainder of the year, while local manufacturing expected in 2027 should help ease pressure and support growth and margin expansion over time.
Smiley also highlighted KarXT, which is expected to launch in the second quarter for schizophrenia in China. He called it the first novel mechanism for schizophrenia in decades and said its inclusion in national treatment guidelines ahead of launch reflects clinical confidence. The company is also anticipating potential regulatory approval for TIVDAK this year and plans to leverage its ZEJULA infrastructure to support uptake.
Zoci data and collaborations remain central to oncology strategy
President and Head of Global Research and Development Rafael Amado focused much of his update on zoci, the company’s lead oncology program. In extensive-stage small cell lung cancer, Amado said zoci demonstrated a confirmed intracranial overall response rate of 62.5% at the go-forward dose of 1.6 mg/kg, with a best overall intracranial response rate approaching 69%, including four complete responses. Grade 3 or higher treatment-related adverse events were approximately 16%.
Amado described the intracranial activity as a meaningful signal of differentiation in a treatment-resistant cancer type and said the safety profile reinforces the company’s view that zoci has best-in-class potential. The registrational Phase 3 DLLEVATE study is enrolling and remains on track to complete enrollment in the first half of 2027, positioning the company for an interim analysis and potential accelerated approval submission next year.
In extrapulmonary neuroendocrine carcinoma, Amado said zoci demonstrated a confirmed overall response rate of 38.2%, comparing favorably with commonly used regimens that typically show response rates of about 18% with limited durability. He said Zai Lab is engaging regulators on a potential registrational path and could initiate a registrational or confirmatory study by year-end, depending on those discussions.
Zai Lab also discussed collaborations with Amgen and Boehringer Ingelheim to evaluate zoci in combination with T-cell engagers. Amado said the rationale is that zoci provides rapid tumor debulking through targeted cytotoxicity, while T-cell engagers drive antigen-dependent immune-mediated killing. He said a Phase 1 study with Amgen, including a cohort of untreated patients receiving zoci, IMDELLTRA and Imfinzi, is already enrolling, while the Boehringer Ingelheim study is expected to follow in the coming months.
Immunology pipeline updates include ZL-1503 and povetacicept
In immunology, Zai Lab highlighted ZL-1503, its IL-13/IL-31Rα bispecific antibody. Amado said recent preclinical data showed rapid and durable inhibition of IL-13-driven inflammation and IL-31-mediated pruritus across disease models in non-human primates, with sustained effects after a single dose.
Amado said initial Phase 1 data in healthy volunteers and atopic dermatitis patients are expected in the second half of the year. During the question-and-answer session, he said healthy volunteer data should help assess safety, pharmacokinetics, dosing interval, pharmacodynamics and anti-drug antibodies. He said Zai Lab expects to have healthy volunteer data by year-end and at least some data from atopic dermatitis cohorts, with a possible publication before year-end.
Amado said potential differentiation for ZL-1503 could include less frequent dosing, early and meaningful reduction in pruritus, improvement in skin pain and competitive EASI-75 results. He said the company plans to conduct a Phase 2 study.
The company also cited positive Phase 3 interim results reported by partner Vertex for povetacicept in IgA nephropathy. Amado said the RAINIER study showed approximately a 50% reduction in proteinuria versus placebo and met its primary and secondary endpoints. In response to an analyst question, he said Zai Lab expects to discuss regulatory requirements with China’s Center for Drug Evaluation and does not expect a bridging study to be required because Chinese patients were included in the study.
Management points to 2027 return to revenue growth
While management acknowledged near-term revenue pressure in 2026, executives framed the year as one focused on execution, including commercial stabilization, new launches and pipeline advancement.
Smiley said Zai Lab is applying artificial intelligence to commercial execution, including physician targeting, field force optimization and competitive insights. Du said recent policy developments in the region, including a State Council directive supporting innovative medicines, could benefit the company over the medium to long term.
“2026 is about execution,” Smiley said, citing key launches, portfolio stabilization and momentum building as priorities.
About Zai Lab NASDAQ: ZLAB
Zai Lab Ltd NASDAQ: ZLAB is a biopharmaceutical company focused on the research, development, manufacturing and commercialization of innovative therapies. Headquartered in Shanghai, China, Zai Lab operates R&D centers in Asia and the United States and maintains commercial offices across Greater China, North America, Europe and Australia. The company's end-to-end platform encompasses discovery biology, translational development, clinical research and global supply chain management.
The company's marketed portfolio is anchored by Brukinsa (zanubrutinib), a next-generation Bruton's tyrosine kinase inhibitor approved for several B-cell malignancies.
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