Zai Lab NASDAQ: ZLAB said its second-quarter net product revenue rose 11% sequentially to $105.8 million as the company continued to invest in a pipeline it expects to support a transition into a global biopharmaceutical business.
Founder, Chairperson and CEO Samantha Du said the company is advancing internally developed medicines for patients worldwide while maintaining a commercially profitable business in China. Zai Lab expects its first U.S. regulatory submission next year and cited the potential for its first U.S. product launch in 2028.
“Zai Lab has reached an important inflection point in its evolution from a regional business into a global biopharmaceutical company,” Du said.
Commercial revenue and profitability strategy
Chief Financial Officer Yajing Chen said product revenue growth in the quarter was supported by double-digit sequential volume growth for VYVGART, continued steady performance from ZEJULA, strength in XACDURO despite supply constraints, and an “excellent” early launch for KarXT.
The company expects product sales to stabilize during the second half of 2026 before returning to what management described as meaningful year-over-year growth in 2027. Chen said KarXT is expected to be an important contributor, citing its status as a new mechanism of action for schizophrenia, its efficacy across positive and negative symptoms, the lack of a boxed warning and its inclusion in national treatment guidelines.
Zai Lab also plans to pursue inclusion of VYVGART HYTRULO in China’s National Reimbursement Drug List, or NRDL, and is preparing for a gradual shift in the VYVGART franchise from intravenous administration to subcutaneous delivery. Chen cautioned that reported second-half revenue may not fully reflect underlying demand because of the timing of NRDL-related commercial dynamics.
Operating Partner Yizhe Wang said the company’s near-term commercial priorities are returning ZEJULA to growth, sustaining underlying demand for VYVGART and executing the KarXT launch. He identified new patient starts as a key metric for the company’s major brands and said management aims to stabilize revenue over the next several quarters before pursuing stronger growth in 2027.
Chen said Zai Lab is maintaining disciplined investment in higher-priority development programs while seeking productivity improvements through organizational streamlining and use of artificial intelligence across clinical development, regulatory, commercial and corporate functions. Operating expenses are expected to remain broadly stable for the rest of the year. The company ended the quarter with $717.5 million in cash.
Zoci registrational plans expand
President and Head of Global Research and Development Rafael Amado outlined plans for zoci, the company’s DLL3-targeted antibody-drug conjugate, or ADC, in small cell lung cancer and neuroendocrine carcinoma.
Zai Lab expects to have three registrational programs underway by the end of 2026 across small cell lung cancer and neuroendocrine carcinoma. Its global Phase III study in second-line and later small cell lung cancer is expected to complete enrollment in the first half of 2027. The company anticipates a U.S. accelerated-approval submission later that year and potential approval in 2028.
At the European Society for Medical Oncology meeting in October, the company plans to present data from about 60 patients receiving zoci with a PD-L1 inhibitor, with or without chemotherapy, in first-line small cell lung cancer or maintenance treatment. Amado said most participants will have received the doublet regimen at zoci’s 1.6 mg/kg dose, and the data are expected to have a median follow-up of roughly eight to nine months.
Management said existing immunotherapy-plus-chemotherapy regimens typically produce response rates of 60% to 70% and median progression-free survival of about five months. Amado said Zai Lab would view response rates around 80% and a 50% improvement in median progression-free survival as clinically meaningful. The company expects to initiate a Phase III chemo-sparing combination study in the coming months.
In extrapulmonary neuroendocrine carcinoma, Amado said zoci produced a confirmed objective response rate of 38.2% in second-line and later treatment, compared with roughly 18% for currently used regimens. The company is discussing a possible approval pathway with regulators based on expanded single-arm data, followed by a potential first-line development path.
Zai Lab is also collaborating with Amgen and Boehringer Ingelheim on zoci combinations with T-cell engagers. A global Phase Ib study with Amgen is enrolling, including untreated small cell lung cancer patients receiving zoci, IMDELLTRA and IMFINZI. A Phase Ib/II trial with Boehringer Ingelheim in neuroendocrine carcinoma is expected to begin in coming months. Amado said data from the Amgen-led combination program may be presented in the second half of 2027.
Immunology and earlier-stage pipeline
The company’s other major global program is ZL-1503, a long-acting bispecific antibody targeting interleukin-13 and interleukin-31 receptor alpha for moderate-to-severe atopic dermatitis. Zai Lab expects to present first-in-human data from healthy volunteers in the second half of 2026, including pharmacokinetic, biomarker, safety and immunogenicity findings.
The company is also enrolling atopic dermatitis patients in the multiple-ascending-dose portion of the study and expects to report those results at a medical conference next year. Amado said the program is designed to support robust skin clearance, rapid itch reduction and less frequent dosing, though he said it was premature to specify the eventual dose or dosing schedule.
Elsewhere, Zai Lab is enrolling patients in a global Phase I trial of ZL-6201, an LRRC15-targeting ADC, with initial dose-escalation data expected in the first half of 2027. The company also expects to submit an investigational new drug application by year-end for ZL-1311, a next-generation MUC17-targeted T-cell engager for gastrointestinal cancers.
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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