Zai Lab Limited

Hello, ladies and gentlemen. Thank you for standing by and welcome to Xyleb's fourth quarter and full year 2024 Financial Results Conference call. At this time, all participants are in the listen-only mode. Later, we'll conduct a question and answer session and instructions will follow at a time. As a reminder, today's call is being recorded. It is now my pleasure to turn the floor over to Christine Zhou, Senior Vice President of Investor Relations.

Please go ahead. Thank you, Operator.

Hello, everyone, and welcome to Xilab's fourth quarter and full year 2024 earnings call. Today's call will be led by Dr. Samantha Du, Xilab's founder, CEO, and chairperson. She will be joined by Josh Smiley, President and Chief Operating Officer, Dr. Rafael Amado, President and Head of Global Research and Development, and Dr. Yajing Chen, Chief Financial Officer. Jonathan Wang, our Chief Business Officer, will also be available to answer questions during the Q&A portion of the call. As a reminder, during today's call, we will be making certain forward-looking statements based on our current expectations. These statements are subject to numerous risks and uncertainties that may cause actual results to differ materially from what we expect due to a variety of factors, including those discussed in our SEC filings. We will also refer to adjusted loss from operations, which is a non-GAAP financial measure. Please refer to our earnings release furnished with the SEC on February 27, 2025, for additional information on this non-GAAP financial measure. At this time, it is my pleasure to turn the call over to Dr. Samantha Du. Thank you, Christine.

Good morning and good evening, everyone. Thank you for joining us today. 2024 was a pivotal year for XyLab, marked by strong commercial performance, groundbreaking advancements, in our global pipeline and a clear path to profitability. In 2023, we outlined a bold vision for revenue growth targeting a five-year paper of 50% through the end of 2028. We are delivering on this vision. Our total revenue for 2024 grew 50% year-on-year with an exceptional 66% growth in the fourth quarter. LeafGuard had an excellent first full year of launch, generating $93.6 million in sales in 2024, making it one of the best immunology launches in China. We made substantial progress in advancing our original assets. We recently launched several new products, including LeafGuard Hydrolo for GMT and CIDP, Octiro for ROS1 non-small cell lung cancer, and ZecDural for bone-money infections. We also reported a series of positive data readouts, including CAR-CT for schizophrenia, tumor-treating fields for pancreatic cancer, and TID-DAT for cervical cancer, paving the way for multiple launches next year. Furthermore, we're advancing our other innovative assets, including the Matilda map for first-line gastric cancer, POVI for IgM, and GL1108 for Theron IADG, on top of exploring additional indications for VidGuard and CAR-ST. These successes together set the stage for strong revenue growth over the next few years. As a key part of our mission to address unmet medical needs around the world, we took a significant step in 2024 to accelerate our global pipeline. In October at EMA, We presented compiling early clinical results for DL1310, our potential first-in-class, and banking class DL3 ADC in small cell lung cancer. Preliminary data demonstrated a 74% ORR, including both confirmed and unconfirmed responses. With further follow-up and additional patients, we continue to see high rates of confirmed responses and we look forward to sharing detailed updates at a major medical conference in the first half of this year. The pace of progress with GL1310 has been remarkable, moving from Phase 1 initiation in January 2024 to a potential pivotal trial this year. Positioning us for possible FDA approval in small cell lung cancer in 2027, subject to ongoing regulatory discussions with FDA. As you know, DL-3 is expressing various other tumor types. We have opened an IUD to begin to explore additional indications this quarter to maximize the potential benefits for patients. Beyond DL-1310, we're advancing a broader pipeline of globally differentiated assets. We plan to initiate global trials for an IL-13 or IL-31 specific antibody for atopic dermatitis and an LRRC 15 ADC for solid tumors. Lastly, we have taken decisive action to optimize our cost structure, improve efficiency across the organization while continuing to invest in key growth drivers. Our large firm operations in the fourth quarter and for the full year are improved year over year. by 45% and 23% respectively. We are on track to reach profitability in the fourth quarter of 2025, and we have a robust cash position of $879.7 million to support our next phase of growth. Today, Satellite is at a major value inflection point, the team committed to entrepreneurship, innovation, and execution excellence. We look forward to delivering on our goals and capitalizing on the transformative opportunities that lie ahead in 2025 and beyond. We remain confident in our ability to reach our $2 billion revenue target by 2028, supported by strong revenue growth in our current commercial portfolio and the expected launches of multiple additional products or indications in the next few years With that, I'll pass the call to Josh. Josh?

Thank you, Samantha, and thank you, everyone, for joining the call today. We had a good year in 2024, as demonstrated by our strong commercial execution, important advancements across our regional and global R&D pipeline, and multiple regulatory successes. In the fourth quarter, total revenue grew an impressive 66% year over year to $109.1 million. On a full-year basis, total revenue increased 50% to $399 million, with growth driven by the strong adoption of VivGuard in its first year on the NRDL, along with the continued growth in Zajula and New Zyra sales. We are proud of this outstanding top-line growth, and with three new launches underway, including VivGuard Hytrulo, Zactoro, and Ogtiro, we expect to continue to build strong momentum this year. Let's start with VivGuard. which has had an exceptional launch year, delivering full year sales of $93.6 million and fourth quarter sales of $30 million. VivGuard is a testament to the outstanding execution of our commercial team, and we are excited about what this pipeline and product program will achieve in coming years. There are several factors contributing to this momentum with VivGuard. An expanding network of prescribers, greater access through hospital listings, new patient acquisition, and a growing number of patients starting treatment in the maintenance phase to manage symptoms and prevent relapses. Starting with physicians, we continue to grow the breadth and depth of our prescriber base, utilizing a strong scientific and data-driven approach to help educate our physicians. More than 2,000 physicians have prescribed ZivGuard, including every one of our top 300 prescribers. In the fourth quarter, we saw a significant increase in the number of physicians who have prescribed three or more cycles for patients, highlighting the growing confidence in the treatment's long-term benefits. In addition, awareness of the FCRN mechanism across the physician community is growing. This momentum will be further amplified as we launch VivGuard HyTRULO for CIDP, unlocking additional opportunities for growth. On hospitals, we successfully achieved listings at all of our top targeted hospitals last year, covering approximately 65% of GMG market potential. We are now targeting the next wave of hospital listings, increasing our coverage to approximately 85% of the market. In parallel, we will focus on enhancing supplemental insurance coverage to offer additional support for the patient community. We're also seeing increased utilization of VivGuard as part of the maintenance treatment. Approximately 40% of patients who initiated treatment in the third quarter of 2024 returned for an additional cycle in the fourth quarter, which aligns with clinical trial findings and reinforces our confidence in long-term patient adherence. Additionally, new formulations such as DivGuard Hytrulo and the pre-filled syringe have the potential to ease the treatment burden, enhancing the overall patient experience and improving DOT. We're making great progress, but there's still much to do. With over 170,000 GMG patients in China, our current market penetration is under 10%. indicating vast potential for growth. As we look to 2025, we have well-defined strategies in place to drive new patient growth and the duration of treatment for VivGuard and GMG. First, we will continue to establish infusion centers in top-tier hospitals, enhancing patient access and convenience for treatment. Second, the upcoming mid-2025 update to the national GMG guidelines is expected to provide tailwinds, positioning VivGuard as a more prominent treatment option for GMG. We will use this opportunity to increase physician education and shift prescribing behaviors toward a more proactive usage of VivGuard in the maintenance phase. Third, we are promoting the regular activities of daily living, or ADL assessments, reinforcing the importance of ongoing VivGuard maintenance therapy when ADL scores decline to ensure better long-term disease management. And lastly, we are establishing programs designed to enhance patient experience and to further optimize and extend treatment durations. As we execute on these strategies throughout the year, we anticipate a stronger ramp up in the second half of 2025, driven by an expanding pool of both new and returning patients that will have a compounding effect on sales. While we do anticipate quarterly fluctuations due to seasonal factors such as holidays and hospital purchasing patterns, these dynamics are expected to balance out over the course of the year. Now, moving on to our other commercial products, starting with Zijula. It continues to be the leading PARP inhibitor for ovarian cancer in hospital sales in China. We are seeing sales increases driven by increased penetration in first-line BRCA-mutated patients. For Nuzira, the strong sales growth this year was supported by the NRDL inclusion for both IV and oral formulations. The NRDL listing for the IV formulation was successfully renewed in January 2025. We will continue to promote ongoing access and support for patients who rely on this important treatment. In addition, we have three recent product launches that will further contribute to the total revenue growth in 2025. First, VivGuard HyTRULO, which is the subcutaneous formulation of F-gartigimod with a shorter administration time of 30 to 90 seconds for adult patients with GMG and CIDP. HyTRULO is not listed on NRDL this year, but is expected to be a meaningful growth driver over time. Second, OGCHIRO in ROS1 positive non-small cell lung cancer, which comprises between 2% and 3% of the approximately 900,000 new cases of non-small cell lung cancer per year in China. OGCHIRO achieved first-time NRDL listing at the beginning of this year. Third, Zac Doro in hospital-acquired and ventilator-associated pneumonia caused by Acinobacter baumannii infections, of which there are approximately 300,000 cases in China each year. We will leverage the industry-leading commercialization infrastructure of Pfizer in the anti-infective therapeutic area to help accelerate access to this important therapy for patients in need in mainland China. With the confidence we have behind our business, Driven by the expected growth of VivGuard, new product launches, and the continued strong performance of our base business, we are, for the first time, providing total revenue guidance for the full year. We anticipate total revenues for 2025 to be in the range of $560 million to $590 million. In parallel to strong top line growth, we're also focused on operational efficiency and financial discipline. Through our ongoing efforts on enhancing commercial efficiency, optimizing resource allocation, and increasing productivity throughout the entire organization, our loss from operations in the fourth quarter and full year 2024 declined by 45% and 23% year over year. We are on track to reach profitability in the fourth quarter of 2025, and we have a robust cash position of $879.7 million, which allows us to support our next phase of growth as we drive both revenues and profitability. In summary, our strong execution in 2024 reflects Xylem's commitment to deliver on our strategic goals. With a fast-growing Greater China business, expanding global pipeline, and prudent financial discipline, we expect to drive substantial value for our shareholders this year and through the remainder of the decade. And with that, I'll now pass the call over to Rafael to discuss the great progress with our pipeline.

Thank you, Josh. Let me begin by highlighting some of the key progress updates in our global pipeline since our last earnings call, along with our next steps. Starting with CL1310, a potentially highly active first-in-class DLL3 ADC for small cell lung cancer. We presented promising preliminary monotherapy results from the ongoing phase one trial last year, suggesting that this next generation ADC therapy has the potential to deliver antitumor responses in the majority of patients with extensive stage small cell lung cancer, including Blaine lesions, with good tolerability. As Samantha said, we expect to present detailed results at an upcoming major medical conference in the first half of 2025. In January 2025, the US FDA granted orphan drug designation to ZL1310 for small cell lung cancer reflecting its potential to treat patients with this aggressive disease. Globally, small cell lung cancer affects around 372,000 patients each year with a low five-year survival rate of 5% to 10%. Treatment options are limited when patients progress, with the current standard of care resulting in limited clinical benefit. Despite recent advancements such as Starlatumab, there remains a critical need for readily available treatment options that offer improved efficacy and manageable safety. We are working to address this critical gap with urgency. Enrollment in the monotherapy dose optimization study for second-line small cell lung cancer is progressing rapidly with over 35 patients already dosed. We're also assessing potential combinations in the first-line setting and we have initiated a global phase 1 dose escalation study evaluating VL1310 in combination with PD-L1 and PD-L1 plus chemotherapy. We expect to provide data this year. We also plan to initiate a registrational study in second lines plus small cell lung cancer this year, positioning us for a potential approval in 2027. Regulatory interactions with FDA related to accelerated approval for ZL1310 are ongoing. DL03 is also highly expressed in other neuroendocrine tumors, and after obtaining IND clearance earlier this month, we will start a global study soon to explore ZL1310 in this indication. Beyond ZL1310, we expect to advance at least two additional global assets into Phase I development this year. including ZL6201, a novel LRRC15 ADC for solid tumors, and ZL1503, an IL13, IL31 bispecific antibody for atopic dermatitis. We expect to further expand our global pipeline and progress at least one global product into IND enabling or IND submission stage this year. Now moving to our key late-stage programs. Starting with neuroscience, we achieved a major milestone with CARX-C, our M1, M4 cholinergic receptor agonist for schizophrenia. In January 2025, China's NMPA accepted our NDA for CARX-C, marking an important step towards bringing the first novel schizophrenia treatment to China in decades. Schizophrenia affects more than 8 million patients in China, with many patients unable to achieve adequate symptom control due to the limited effectiveness and burdensome side effects of currently available treatments. In clinical trials, characteristic demonstrated robust efficacy, achieving statistically significant reductions in all study endpoints, while maintaining a tolerable safety profile, free of the side effects of classical antipsychotics. If approved, CARF-C could redefine treatment for the millions of patients whose symptoms are inadequately managed by existing treatment options. Moving now to oncology for tumor-treating fields. In December 2024, XyLab and NovoCura announced that the Pivotal Phase III Panova III trial in unreceptable locally advanced pancreatic cancer met its primary endpoint, demonstrating a statistically significant improvement in median overall survival versus control. This is the first phase two study to show a survival benefit in this patient population, and we plan to file for regulatory approval of tumor-treating fields in China in the second half of 2025. In China, approximately 134,000 new cases of pancreatic cancer are diagnosed each year, and these patients have limited effective treatment options and a poor prognosis. with a median survival of under 12 months. We hope to expand treatment options and improve outcomes for these patients in need. Turning to Tisotumab-Vedutin, or TIFDAC, our tissue factor ADC for recurrent or metastatic cervical cancer. In January 2025, we reported positive top-line results from the China subpopulation of the Global Phase III INOVA-TD301 study. This test demonstrated a clinically meaningful improvement in overall survival compared to chemotherapy with a manageable safety profile as observed in the global study. Cervical cancer remains a leading cause of cancer-related deaths in women in China with approximately 150,000 new cases annually. Patients currently have limited treatment options once their cancer recurs or spreads after initial treatment. and the current treatments have a different mechanism of action and toxicities. We plan to submit a biologics license application to the NMPA for recurring metastatic cervical cancer in the first quarter of 2025. For the marituzumab, we're awaiting the results for both pivotal studies in gastric cancer, starting with 42-101, which we expect in the first half of this year, and 42-102 in the second half of the year. The marituzumab has the potential to become the first targeted therapy specifically for FDFR2B-positive gastric cancer in China. Next, with our immunology franchise. SRTG-MOD continues to demonstrate broad potential across IgG-mediated diseases. Our partner, Argenix, announced in November 2024, the decision to advance Cartesimab subcutaneously into the Phase 2-3 alkydia study for idiopathic inflammatory myopathy, IIM, or myositis, following promising Phase 2 results. The subtypes of myositis evaluated in this study affect approximately 170,000 patients in China alone, with no targeted therapies currently approved. Xi Lab is actively participating in the Greater China Cohort of this global registration of trials. We will continue to explore the pipeline in a product potential of F-carcinoma to treat other IgG-mediated autoimmune indications, including thyroid eye disease, or TED, myositis, seronegative GMG, ocular MG, and lupus nephritis. In 2025, we expect top-line results from the global Phase III study of seronegative generalized myasthenia gravis and the Phase II study of lupus nephritis. We also recently strengthened our regional immunology franchise with two late-stage assets that are highly synergistic with F. cartilagema, povitacizab immunoglobulin A nephropathy and ZL1108 in thyroid eye disease. Povitacizab is a novel dual BAF B-cell activating factor and APRIL, a proliferation-inducing ligand antagonist with best-in-class potential in IgA nephropathy, supported by its compelling Phase II data. In China, IgA nephropathy has an estimated prevalence of 3 to 5 million patients, yet there are currently no approved therapies targeting the underlying cause of the disease. Despite standard of care treatments, including ACE inhibitors and steroids, 30 to 40% of patients eventually progress to end-stage renal disease, underscoring the significant need for innovative treatment options. China has already joined the Global Pivotal Trial for Pogovitacizab in IGN, and we are leveraging our regional expertise and established footprint for renal diseases with FKTG-MOG to accelerate development timelines. We aim to bring this first-in-class therapy to patients expeditiously. ZL1108 is an anti-IGF1R antibody, which represents another valuable addition to our regional portfolio. It significantly reduces the treatment burden for thyroid eye disease through shorter infusion times and a more concise course of therapy compared to other anti-IGF1R therapies. In its phase three studies, ZL1108 has consistently demonstrated reductions in proctosis, diplopia, and CAS across both active and chronic thyroid eye disease. We expect to initiate a China bridging study for TET patients in mid-2025. Thyroid eye disease affects approximately 3.3 million people in China, of which 1 million are diagnosed with moderate to severe forms of the disease. While estimates can vary, the active or acute phase of thyroid eye disease generally lasts between 6 and 24 months. Roughly 20 to 30% of the overall disease course before transitioning into a chronic phase that typically makes up the remaining 70 to 80%. F-cortisumab is under evaluation in active phase, and thus, ZL1108 complements a test franchise, creating synergies with F-cortisumab in both development and commercialization. The wealth of advancements reflects our relentless focus on delivering innovative potential best-in-class or first-in-class therapies to patients with high unmet needs. We will continue to execute with speed and precision, advancing our pipeline while exploring new opportunities. I look forward to sharing further updates in the coming quarters. And now Yajing will give an overview of our financial results. Yajing.

Now, I will discuss highlights from our fourth quarter and four-year 2024 financial results compared to the prior year periods. We had a strong car plant growth in the fourth quarter and for 2024, driven by increased sales for ViviGuard, Zedula, and then Uzaira. Total net product revenue grew 65% to $108.5 million in the fourth quarter. For the full year, net product revenue was $397.6 million, reflecting robust growth of 49% year-over-year. Our focus on financial discipline and ongoing efficiency efforts was also reflected on the expenses side. R&D expenses for the fourth quarter declined 36% year-over-year, and the full year R&D expenses declined 12% as late-stage studies completed and as we continue to prioritize our investment to advancing high-value regional and global pipeline programs. SG&A expenses in the fourth quarter were flat year-over-year, and the modest 6% increase for the full year was primarily due to higher general selling expenses related to the launch of ViviGuard and the growing sales for Nucira. partially offset by a decrease in G&A expenses and selling expenses for other products. Our last fund operations decreased 45% for the fourth quarter to $67.9 million and a 23% for the full year to $282.1 million. When you adjust our last fund operations to exclude certain non-cash items, specifically depreciation, amortization, and share-based compensation. We had adjusted loss for operations of $47.6 million in the fourth quarter and $199.6 million for the full year, reflecting year-over-year improvement of 53% and 28% respectively. We are in a strong financial position, ending the quarter with a cash position of $879.7 million. Now, turning to our financial outlook for 2025, we expect our 2025 total revenues to be in the range of $560 million to $590 million. This revenue forecast reflects strong growth for the Visica franchise, continued growth across our other products, including Zejula and Muzaira, and contributions from our newly launched products, Actira and Exactoro. Lastly, based on our operating plan and our anticipated revenue growth, we expect to achieve profitability in the fourth quarter of 2025. And with that, I would now like to turn the call back over to the operator to open up the line for questions. Operator.

Thank you. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. We will now take our first question from the line of Anupam Rama from JP Morgan. Please ask your question.

Hey, guys. Thanks so much for taking the question, and congrats on all the progress. Just when it comes to the 2025 revenue guidance, which came in ahead of consensus, Wondering if there are products beyond this guard that we should be thinking about outside growth for the year. Thanks so much.

Hi, I promise Josh. No, I think if you look at our revenue range, we expect the base business to grow, you know, strongly. We'd point to Zajula and Nuzaira as particular growth drivers. VivGuard, we expect to grow faster than the overall you know, rate of growth implied in the 560 to 590. And, of course, we're launching a first full-year launch for Octairo and Zactoro, so we will expect some sales there. But I think there it's just strong performance across the brands. We're excited about the year.

Next question, operator.

Thank you. We will now take our next question from the line of Michael E. from Jefferies. Please ask your question, Michael.

Hey, good morning. Thank you for the question. We had two. First was on VivGuard. While there's no specific revenue guidance for 2025 for that product line, I think you made some nice comments around the shape of the curve for this year. Can you just put a little more color on the growth trajectory in the first half of the year versus the second half of the year, and is that driven by the recruitment guidelines? Maybe just help us out a little bit about where the trajectory of Zejulia could be by the end of the year. And then a R&D question around DLL3. Can you just confirm your thoughts about how fast you can move into a pivotal study? I think there's another Chinese agency that was recently in-licensed. and put up some data around a 70% response rate. So I'm just trying to think about the competitive dynamic there in this unit, which you can go. Thank you.

Thanks, Mike. It's Josh. First on VivGuard, I think we're excited about the momentum we have coming into this year and expect to have a really good growth year again in 2025. As you pointed out, I think what we particularly expect to see as we get through the year is the compounding effect of The new patients we're starting, particularly those in the maintenance or what we would call consolidation phase, where these are patients who are going to expect to go on multiple cycles through the year, and of course, those build up and accumulate through the year. Mid-year, we do expect an official update to the myasthenia gravis treatment guidelines in China that more prominently features VivGuard, so we'll get some benefits there, and of course, we're while CIDP is not on the NRDL, we're in the process of launching that and making sure patients who do have the supplemental insurance or other ways of accessing the drug that they get it as well. So I think those things, when you put them together, just lead to even stronger, I think, second half growth than we'll see in the first half, but certainly don't mean to imply that we won't see growth throughout the year. And again, very, very strong outlook for VivGuard for this year. Rafael will take the DLL3 question.

Thank you, Michael. With regards to the regulatory pathway and speed, we think we have an opportunity to achieve accelerated approval. We are in discussions with regulators, and we plan to start that study this year. We've treated a number of patients already that will be presented in the first half of this year. And yes, there are other DLL-3 products, but they're much earlier, probably a year and a half or so behind. So we're confident that we could be the first ones to be approved, and the properties continue to be very similar to what we started to observe with the first patients that we treated. Overall, very confident that we will start the study this year, and that accelerated approval is a viable pathway.

Very good. Thank you.

Thank you. We will now take our next question from the line of Jonathan Chang from Levering Partners. Please ask your question, Jonathan.

Hello. This is Yander Li for Jonathan Chang. Thanks for taking my question. So I have a follow-up question regarding the regulator strategy for VL1310, the VL3 program. So for the pivotal study, could you share your current view on whether you can do a single-arm study or you would need a randomized control study to support the accelerated approval? And how does that influence your thoughts on the 2023 BOA submission timeline? And I have a follow-up question after that. Thanks.

Yeah, so it's a good question, but obviously we don't discuss details of regulatory discussions with FDA. There's been two products approved as single arms, but there are other products that are approved as accelerated approval in randomized trials. And the advantage of the latter is that one can confirm the approval with the definitive endpoint of survival. So how will we proceed will be revealed once we launch that study. Whichever way we go forward, we will move expeditiously. As I said, we will start today. There's a lot of enthusiasm from investigators who accrued to this product, and we're confident we will be able to move this and potentially get approval in 2027. So, stay tuned.

Got it. Yeah, and can I just add a follow-up question? So, can you comment on the, like, the 2023, oh, sorry, 2026, the BOA submission timeline, relatively to the timeline of potential Tarlata map for approval? and the time of other B73-ADC physical study readouts. Does that, like, kind of align with what you're thinking? Thank you.

Yeah, there are obviously other products there. Tarlatan has accelerated approval. It's a very different agent, and obviously, So there's been precedence that even with full approval in the same line of therapy, accelerated approval can be granted. There are multiple examples in the hematology field. The mechanism of action is different. The toxicity is different. And, you know, so far the level of activity of 1310 is higher. It's in the 70% range as opposed to 40%. So we're not too concerned about, you know, the potential of, you know, Tarlatamab getting full approval before our PDUFA date. So that's with regards to Tarlatamab in second line. With B7H3, my sense is that they started or they plan to start a pivotal trial, but We don't really comment on the details of competitors, and I actually do not know what their timelines are. All I can say is that our plan is to move as fast as possible with an accelerated approval pathway.

Understood. Thank you so much for answering my questions.

Thank you. Our next question comes from the line of Igor Notomovic from CT. Please ask your question, Igor.

Hi, this is Rina. Thanks for taking my question. I just wanted to ask on DLL3, just wondering if you could talk about your strategy going into the first line setting and then with the update expected at the upcoming medical congress, just wondering what kind of data we should expect there, like how many patients, efficacy points, anything you could tell us there.

Thank you for the question. I'll answer this. Second question first, we will have data on the various dose escalation doses, and we should have a fair amount of maturity in the earlier doses and, you know, definitely enough time for responses to have been confirmed. In addition to that, as we mentioned in the prior quarter, started the dose optimization, and we've accrued really fast to that randomized cohort of the study. That was 50 patients, and we should have at least the opportunity to be confirmed in the vast majority of patients. So we think we'll have data in about 75 patients or so at different levels of follow-up, obviously. With regards to first line, we were pretty active in first line. We started combinations with PD-L1 inhibitor, and then very soon we're going to start with carboplatin plus PD-L1 inhibitor, so a triplet. Our initial goal is to avoid etoposide because it's a very mild suppressive drug, and that's really what tends to limit the length of therapy. But there's been precedence, as you know, of other ADCs that, combined with PD-1 inhibitor, checkpoint inhibitors, have been able to supplant chemotherapy, such as PADSF and GU. If you think about the fact that we can get 70% in second line and the response rate in first line is slightly lower than that is in the 50s to 60s, you know, it's not very far-fetched to think that ZL1310 plus PE1 inhibitor could be potentially superior to the current standard of care. So this is the way we're thinking. Nevertheless, we are going to test the combination with CARBO, and then we will have to select the dose for ZL1310 with that combination. We should have data this year on that dose optimization, and then we will have regulatory discussions as to how to move it into frontline.

That makes sense. Super helpful. Thanks for taking my question. Thank you. We will now take questions from the line of Linhai Zhao from Goldman Sachs. Please ask your question, Linhai.

Thanks for taking my question. I have two questions. The first one is about FGAR. Since we have the CIDP and also the SC formula approved in the second half of 2024, I'm curious what has been the observations of real-world patient usage and adoptions we have observed so far, and in terms of cells breakdown, what percentage of cells coming from the CIDP and subcutaneous formula? And in the longer term, what percentage would you expect would come from this CIDP and sub-Q formula? That's the first question. And the second question is about CAR XT. Since we have Our NDA has been accepted in January. That means that the China approval should be around roughly a year away. And most recently, BMS has also shown that they have received very encouraging feedbacks, and the early trend has been pretty good. But we all know that's in the U.S. market. So in the China market, can you share a bit more on the potential differences in the schizophrenia treatment between U.S. and how would you see the potential commercial hurdles in China, and in addition, any updates on the ADP clinical development? Thank you.

Thanks for the question. It's Josh. I'll start, and then Rafael can talk a little bit about ADP for RxT. First one, your question about CIDP, in VivGuard, just keep in mind that while we received approval by the time we got the product up for commercial launch, it was right at the end of 2024. We do not have NRDL listing for ITRULO or CIDP in 2025, so I think we expect a relatively limited impact. It's only going to be available through supplemental insurance or a cash-paying market. So we're really looking forward to listing in later years and full benefit there. So our focus this year, while we do want patients with CIDP to have the opportunity to benefit from this product, really the vast majority of our sales and efforts will focus on GMG in 2025 and GMG in an IV formulation. To the question about CAR-XT, I think we are very excited about the the commercial opportunity for CAR XT and schizophrenia. Of course, as you mentioned, we submitted at the end of last year and are looking forward to an approval and a launch. There are eight million patients with schizophrenia in China, about four million of whom are seeking care in pretty intensive settings, typically using an atypical antipsychotic. And I think we know from the clinical trial experience and certainly what BMS is seeing in the U.S. is that CoBenfi or CarXT provides a really important opportunity to help patients who are not responding well to atypical antipsychotics or who, you know, can get more of the positive, you know, the negative symptom relief that you can get with Covenfe versus the atypical antipsychotic. So we're just excited to get the product approved and start to launch. We'll launch with a sales force in about 150-person range focused on these big treatment centers, and we're looking forward to that, and I think it's going to be a great product in China. For schizophrenia, Rafael, maybe you can make some comments about... Alzheimer's.

Sure. So in dementia-related psychosis, there's a series of studies. They're called ADEPT studies that are being executed by BMS. As you know, antipsychotics have a black box warning against the use in dementia, which CAR-XT doesn't have. And in fact, we're seeking an indication in this setting, which is really an unmet need. We very much want to pursue this indication, and we're in discussions with PMS as to, you know, what the best regulatory pathway is, whether it's participating in ADEPT versus doing other, you know, separate bridging trial or... other potential registration pathways, but that will be performed this year. And just to reiterate that it's an indication that we will be pursuing.

Thank you.

Thank you. We'll now take our next question from the line of Lee Washik from Canto Fitzgerald. Please go ahead.

Hey guys, thanks for taking our questions. I have one on pipeline, one on commercial. I guess for ZL1310 and DL3 ADC, in terms of durability, where would you place ADC versus, you know, the other modalities such as T cell engagers or radial? And can you talk about, you know, chemosensitivity or radial sensitivity in small cell lung cancer? And then, you know, if you align on, you know, a path for a second line, how should we think about the confirmatory study and the enrollment timeline there? And then second for VidGuard, anything you can share in terms of, you know, breakdown of new patient ads versus maintenance for Q4? And then, you know, how should we think about the sequential contribution from each group going forward?

Rafael, do you want to start on?

Yeah, I'll start with DLL3. You know, I think the durability of response, which I think was your first comment, it's still early to be able to know what the median durability of response is going to be. And I think that is a good thing. Perhaps by ASCO we may know, but we haven't reached it yet, last time we looked. And I think a good DOR, you know, would be, you know, if, you know, 50% of patients are at six months or greater, you know, that would be good. I think something important, particularly given that there are so many patients that respond. If you look at Tarlatamab, the response rate is in the 40s with DOR of nine months. That's really what's in the label. So we hope to be there about those numbers. Hopefully, the longer, the better. In terms of chemosensitivity, I'm not sure exactly whether you're referring to whether patients were platinum refractory or resistant. We've looked at that, and there's really no difference in sensitivity to 1310. Patients tend to respond with the same proportion whether or not they're refractory or resistant to platinum, and that is not the case with other agents, as you may know. With regards to the confirmatory trial, it depends on how the accelerated approval is obtained. If it's obtained in the context of a randomized trial where accelerated approval is obtained by response, then the same study will confirm the approval using time-to-event endpoint, which tends to be overall survival in second line. Otherwise, one has to do a second study, which is what TarlataMath has done. So, you know, the regulatory pathway, we will disclose it once that study starts. So, I hope that, you know, answers your questions with regards to 1310 and, you know, obviously we'll know more at the time of the presentation.

Thanks, Rafael. Thanks, Lee. Thanks, Lee. On VivGuard, your question about the proportion of patients, where they're coming from, I think we continue to see about 1,000 patient initiations per month. So we're really pleased with that. And increasingly, those patients are being started in the maintenance or consolidation phase of their disease. So these, again, are the patients who will maintain treatment on DivGuard for three to five cycles per year based on what we know from the clinical trials and from real-world studies from Argenix. And I think that the majority of patients now that we're getting on a monthly basis are starting in that setting. And so to your question, the more that we get, as we progress through the year this year, you're going to have that reservoir of existing patients coming back in for their second, third, and fourth courses. And as I mentioned at the beginning of the call, if we just look at patients who started on VivGuard in the third quarter of 2023, about 40% of those patients had already come back in in the fourth quarter, come back into their physicians to start a second course of therapy. So we're really pleased with the progress we see here. This very much, I think, matches what Argenic saw about this phase of their launch in the U.S. So, again, it gives us a lot of confidence about the long-term prospects here for VivGuard. Thanks.

Right. Thank you. Our next question comes from the line of Jack Lin from Morgan Stanley. Please ask your question, Jack.

Hi. Thank you for taking my question. I have two questions, one on pulpitacetab and the other on the catalyst. So pulpitacetab, I'm curious if you could share more. I mean, you mentioned earlier you'll be drawing a global study, but in terms of timeline, what might we be looking at in terms of China launch? And following that, given that there is some product that has been approved or are in the late stage of development, how do we see the kind of relatively later launch in China? What's our strategy to kind of launch and push public taxes up in China and kind of what the potential might be, especially with consideration of potential labor expansion beyond the IGA end? So that's kind of the first question Povey has to say. And at the same time, I'm just curious if you could help me summarize what are the key top major catalysts that you most expect the company in this coming year? Thank you.

Yes, so perhaps I'll start with Povey. In terms of... Participation in the China trial, you're right. We initiated, I mean, there is enrollment already in China that was initiated and actually is expected to end this year. So we will file with a global trial. And we hope to actually be able to get accelerated approval. This is a disease where there really aren't, you know, active drugs and patients get immunosuppressive drugs. drugs in the form of steroids when they develop proteinuria. And so, you know, being able to have an agent that can hold the natural history of the disease is really important because, as I mentioned in the preparatory remarks, a lot of these patients end up in renal failure. There are other agents out there. This is a BAF April inhibitor. Others target other targets like bilis. April is commonly targeted with these agents. But there are some properties of this product that I think you know, may make it ideal. Obviously, we will have to see comparisons with regards to efficacy and safety, but it's giving, you know, every four weeks. You know, we have data globally as opposed to local data from China only, so we have sort of a more diverse population with regards to activity and safety. And, you know, we have actually longer-term data than some of the you know, the other product. So, you know, we are, we're confident that, you know, particularly if we get accelerated approval, this will be transformational for patients with this disease, particularly those that have the severe form of IgA nephropotene.

Thanks, Jack. This is Samantha. I'll address your key calculus in 2025. Since we have a very limited time left, I'll just give you a few very key highlights. First of all, on the pipeline side, on the global, as we talk today in lengthy about our DL3 assets, ADCI sites, we will have data updates for monotherapy in small cell lung cancer at a major conference in the first half this year. We'll have data updates for DL1310 combo for first-line small cell lung cancer this year. Of course, we also will initiate a pivotal study in small cell lung cancer with possibility for an FDA approval in 2027. We'll initiate a global phase one study in other neuroendocrine cancers in first half this year. And we also, of course, as we mentioned in our news release, we have other preclinical data updates for at least two additional global assets that are moving into phase one development. Recently, the big news would be bimethylamine. We'll see data readouts and followed by NMPA submission in first half 2025. And we also have five regulatory submissions in China this year. And I won't give you the detailed numbers, but BIMA is a big one, as you know, first-line cancer. On the BD side, we have additional global, and if appropriate, regional e-licensing. And, of course, if it's a fit with our strategy, it would be our licensing BD deals as well. So overall, we are very confident that we are going to achieve profitability in full quarter 2025. Thank you.

Thank you. We have now reached the end of the question and answer session. Thank you all very much for your questions. I'll now turn the conference back to Dr. Samantha Du for her closing comments.

Thank you, operator. I want to thank everyone for taking the time to join us on the call today. We appreciate your support. Look forward to updating you again after the first quarter of 2025. Operator, you may now disconnect this call.

Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.