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What changed in Zai Lab Ltd's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Zai Lab Ltd's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+359 added−359 removedSource: 10-K (2026-02-26) vs 10-K (2025-02-27)

Top changes in Zai Lab Ltd's 2025 10-K

359 paragraphs added · 359 removed · 301 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

100 edited+24 added−26 removed172 unchanged
Biggest changeOur innovative global pipeline includes ZL-1310, a potential first-in-class and best-in-class DLL3-targeted ADC for SCLC and other neuroendocrine tumors, for which we are conducting a Phase I study in extensive stage SCLC and initiating a Phase I study in neuroendocrine tumors; ZL-1102, a fully human V H fragment that binds to IL-17, for which we are conducting a global Phase II study in chronic plaque psoriasis; ZL-1503, our internally developed IL-13/IL-31R bispecific antibody for atopic dermatitis and other immunologic diseases, for which we are completing IND-enabling studies; and ZL-6201, a novel potential first-in-class ADC targeting LRRC15 for the treatment of certain solid tumors, for which we are completing IND-enabling studies.
Biggest changeOur innovative global pipeline includes: • Zoci (ZL-1310) , a potential first-in-class and best-in-class DLL3-targeting ADC for SCLC and other neuroendocrine carcinomas, for which we are conducting a Phase 3 study in extensive stage SCLC, a global Phase 1 study in 1L SCLC, and a global Phase 1/2 study in selected solid NEC; • ZL-1503 , our internally developed IL-13/IL-31Rα bispecific antibody for the treatment of atopic dermatitis and other immunologic diseases, for which we are conducting a global Phase 1/1b study evaluating safety, tolerability, and pharmacokinetics in healthy volunteers and participants with moderate to severe atopic dermatitis; • ZL-6201 , a novel potential first-in-class ADC targeting LRRC15, using our internally developed anti-LRRC15 antibody, for the treatment of certain solid tumors, for which the FDA approved the IND in January 2026 and a global Phase 1 study was initiated in the first quarter of 2026; • ZL-1222 , our internally developed PD-1/IL-12 bispecific antibody using a potency-reduced IL-12 and PD-1 cis-activation of IL-12/IL12R to restore T cell function in the tumor microenvironment for the treatment of solid tumors, for which we have initiated IND-enabling studies; and • ZL-1311 , a MUC17/CD3 T-cell engager, which is in pre-clinical development for solid tumors including gastric and gastroesophageal junction cancer.
In 2020, the estimated -3- incidence of CABP in mainland China was approximately 10 million patients, and in 2015, the estimated incidence of ABSSSI in mainland China was 2.8 million patients. We launched the oral and IV formulations of NUZYRA in mainland China in 2021 for the treatment of adults with CABP and/or ABSSSI.
In 2020, the estimated incidence of CABP in mainland China was approximately 10 million patients, and in 2015, the estimated incidence of ABSSSI in mainland China was 2.8 million patients. We launched the oral and IV formulations of NUZYRA in mainland -3- China in 2021 for the treatment of adults with CABP and/or ABSSSI.
We also have multiple other undisclosed IND-enabling assets, and we are targeting at least 1 new IND per year. Regional Pipeline We will also continue to advance and expand our regional pipeline through synergistic opportunities that help us further address significant unmet patient needs.
We also have multiple other undisclosed IND-enabling assets, and we are targeting at least 1 new IND per year. Regional Pipeline We will continue to advance and expand our regional pipeline through synergistic opportunities that help us further address significant unmet patient needs.
For example, our Chief Legal Officer is responsible for developing and updating our enterprise risk management program and targets; reviewing and approving management or mitigation plans for major risk management issues; overseeing implementation of risk management measures; providing guidance and support on our risk management approach to the relevant departments in the Company; and reporting to management, the Board of Directors, and the Audit Committee, as deemed appropriate. • Third Line of Defense: Our Internal Audit function is responsible for evaluating the design, adequacy, operational effectiveness, and efficiency of our enterprise risk management program, including our risk governance structure, processes for enterprise risk identification and management, and risk control processes.
For example, our Chief Legal Officer is responsible for developing and updating our enterprise risk management program and targets; reviewing and approving management or mitigation plans for major risk management issues; overseeing implementation of risk management measures; providing guidance and support on our risk management approach to the relevant departments in the Company; and reporting to management, the Board of Directors, and the Audit Committee, as deemed appropriate. -22- • Third Line of Defense: Our Internal Audit function is responsible for evaluating the design, adequacy, operational effectiveness, and efficiency of our enterprise risk management program, including our risk governance structure, processes for enterprise risk identification and management, and risk control processes.
We are not otherwise obligated to purchase ZEJULA or other licensed products from GSK. argenx (Efgartigimod) In January 2021, we entered into a collaboration and license agreement with argenx, pursuant to which we obtained an exclusive license under certain patents and know-how of argenx to develop and commercialize products containing efgartigimod (including VYVGART and VYVGART Hytrulo) as an active ingredient in all human and animal uses for -10- any preventative or therapeutic indications in Greater China.
We are not otherwise obligated to purchase ZEJULA or other licensed products from GSK. argenx (Efgartigimod) In January 2021, we entered into a collaboration and license agreement with argenx, pursuant to which we obtained an exclusive license under certain patents and know-how of argenx to develop and commercialize products containing efgartigimod (including VYVGART and VYVGART Hytrulo) as an active ingredient in all human and animal uses for any preventative or therapeutic indications in Greater China.
Overseas offering and listing are prohibited under certain circumstances, including where (i) the offering and listing are expressly forbidden by applicable Chinese laws, regulations, and rules; (ii) the intended overseas securities offering and listing may endanger national security as reviewed and determined by competent authorities under the State Council; or (iii) there are material disputes with regard to the ownership of the equity held by the domestic company’s controlling shareholder or by other shareholders that are controlled by the controlling shareholder and/or actual controller.
Overseas offering and listing are prohibited under certain circumstances, including where (i) the offering and listing are expressly forbidden by applicable Chinese laws, regulations, and rules; (ii) the intended overseas securities offering and listing may endanger national security as reviewed -17- and determined by competent authorities under the State Council; or (iii) there are material disputes with regard to the ownership of the equity held by the domestic company’s controlling shareholder or by other shareholders that are controlled by the controlling shareholder and/or actual controller.
In addition, we are committed to being an equal opportunity employer, where everyone is treated equally and respected, regardless of their gender, nationality, marital status, age, disability, or religious beliefs. -21- Our worldwide teams are united by a common mission to improve human health. We strive to maintain a good working relationship with our employees.
In addition, we are committed to being an equal opportunity employer, where everyone is treated equally and respected, regardless of their gender, nationality, marital status, age, disability, or religious beliefs. Our worldwide teams are united by a common mission to improve human health. We strive to maintain a good working relationship with our employees.
BMS (Repotrectinib) In July 2020, we entered into an exclusive license agreement with Turning Point (a company later acquired by BMS) pursuant to which we obtained an exclusive license to develop and commercialize products containing repotrectinib -11- (AUGTYRO) as an active ingredient in all human therapeutic indications in Greater China. We will purchase the licensed products exclusively from BMS.
BMS (Repotrectinib) In July 2020, we entered into an exclusive license agreement with Turning Point (a company later acquired by BMS) pursuant to which we obtained an exclusive license to develop and commercialize products containing repotrectinib (AUGTYRO) as an active ingredient in all human therapeutic indications in Greater China. We will purchase the licensed products exclusively from BMS.
We expect that we will seek to protect our commercial products, product candidates, and core technologies, among other methods, licensing or procuring patent rights to inventions that are important to the development and implementation of our business; relying on trade secrets, know-how, and confidential agreements with third parties; and relying on continuing technological innovation.
We expect that we will seek to protect our -12- commercial products, product candidates, and core technologies, among other methods, licensing or procuring patent rights to inventions that are important to the development and implementation of our business; relying on trade secrets, know-how, and confidential agreements with third parties; and relying on continuing technological innovation.
Since launch, we have helped improve patient access to OPTUNE GIO in mainland China through supplemental insurance coverage. QINLOCK (Ripretinib) QINLOCK is an orally administered switch-control TKI that broadly inhibits KIT and PDGFRα tyrosine kinases, including wild-type and forms with multiple primary and secondary mutations.
Since launch, we have helped improve patient access to OPTUNE GIO in mainland China through supplemental insurance coverage. QINLOCK (Ripretinib) QINLOCK is an orally administered switch-control TKI that broadly inhibits KIT and PDGFRα tyrosine kinases, including wild-type and mutated forms with multiple primary and secondary mutations.
Our Immunology, Neuroscience, and Infectious Disease Pipeline Additional Opportunities for Efgartigimod As discussed in Our Commercial Products and Operations , we have an exclusive license from argenx to develop and commercialize efgartigimod in Greater China, and in mainland China, we have launched VYVGART for the treatment of adult patients with gMG and VYVGART Hytrulo for gMG and CIDP.
Our Immunology, Neuroscience, and Infectious Disease Pipeline Additional Opportunities for Efgartigimod As discussed in Our Commercial Products and Operations , we have an exclusive license from argenx to develop and commercialize efgartigimod in Greater China, and in mainland China, we have launched VYVGART for the -8- treatment of adult patients with gMG and VYVGART Hytrulo for gMG and CIDP.
Zai Biopharmaceutical (Suzhou) Co., Ltd., an operating subsidiary of ours that is domiciled in mainland China, received $15.0 million in capital contributions via four separate contributions from Zai Lab (Hong Kong) Limited, its sole -23- shareholder, domiciled outside of mainland China, from 2017 to 2018 to fund its business operations in mainland China.
Zai Biopharmaceutical (Suzhou) Co., Ltd., an operating subsidiary of ours that is domiciled in mainland China, received $15.0 million in capital contributions via four separate contributions from Zai Lab (Hong Kong) Limited, its sole shareholder, domiciled outside of mainland China, from 2017 to 2018 to fund its business operations in mainland China.
We have a deep and differentiated pipeline of potential first-in-class / best-in-class products across our therapeutic areas. Our pipeline includes certain additional indications for our commercial products as well as new products for which we may seek regulatory approval and commercialization. Our pipeline includes both in-licensed assets as well as assets that we have internally developed.
We have a deep and differentiated pipeline of potential first-in-class / best-in-class products across our therapeutic areas. Our pipeline includes additional indications for our commercial products as well as new products for which we may seek regulatory approval and commercialization. Our pipeline includes both in-licensed assets as well as assets that we have internally developed.
For more information on license agreements for our significant product candidates, see Overview of Significant License and Collaboration Agreements ; for more information on how we source our product candidates, see Manufacturing, Suppliers, and Quality Control ; and for information on -6- risks related to our potential products and R&D activities, including clinical trials and reliance on third parties, see Risk Factors .
For more information on license agreements for our significant product candidates, see Overview of Significant License and Collaboration Agreements ; for how we source our product candidates, see Manufacturing, Suppliers, and Quality Control ; and for risks related to our potential products and R&D activities, including clinical trials and reliance on third parties, see Risk Factors .
Tort Law : Under the PRC Civil Code, producers and sellers of defective products are required to take remedial measures such as the issuance of a warning, the recall of products, etc. in a timely manner, and may be held liable under tort law for any failure to do so, or to do so timely.
Tort Law : Under the PRC Civil Code, producers and sellers of defective products are required to take remedial measures, such as the issuance of a warning or the recall of products, in a timely manner and may be held liable under tort law for any failure to do so, or to do so timely.
Rules for the Regulations on Supervision and Administration of Medical Devices : Laws and regulations in mainland China govern certain aspects of the production, distribution, and clinical trials of medical devices, including -17- reporting, establishment, and maintenance of quality management and quality control measures covering the distribution process, self-inspection, and ethics review.
Rules for the Regulations on Supervision and Administration of Medical Devices : Laws and regulations in mainland China govern certain aspects of the production, distribution, and clinical trials of medical devices, including reporting, establishment, and maintenance of quality management and quality control measures covering the distribution process, self-inspection, and ethics review.
We participate in clinical trials in multiple geographic -13- locations, and compliance with the complex regulations applicable to the conduct of such trials and the use of data derived therefrom is critical to our ability to obtain approval for our products in mainland China and in our other markets.
We participate in clinical trials in multiple geographic locations, and compliance with the complex regulations applicable to the conduct of such trials and the use of data derived therefrom is critical to our ability to obtain approval for our products in mainland China and in our other markets.
Pharmaceutical Distribution To distribute pharmaceutical products in mainland China, including wholesale and retail distribution, a pharmaceutical distribution enterprise must first obtain a Pharmaceutical Distribution Permit, which is effective for five -14- years. Any enterprise holding a Pharmaceutical Distribution Permit is subject to periodic review and inspection by the relevant regulatory authorities.
Pharmaceutical Distribution To distribute pharmaceutical products in mainland China, including wholesale and retail distribution, a pharmaceutical distribution enterprise must first obtain a Pharmaceutical Distribution Permit, which is effective for five years. Any enterprise holding a Pharmaceutical Distribution Permit is subject to periodic review and inspection by the relevant regulatory authorities.
The following provides additional information on certain components of our risk governance structure: • Risk Coordination Council: The Risk Coordination Council, which is comprised of governance function leaders as well as business operations leaders, provides a forum to discuss and identify, monitor, and manage -22- risks across the organization.
The following provides additional information on certain components of our risk governance structure: • Risk Coordination Council: The Risk Coordination Council, which is comprised of governance function leaders as well as business operations leaders, provides a forum to discuss and identify, monitor, and manage risks across the organization.
The Drug Administration Law and related implementing measures established the legal framework for the administration of pharmaceutical products, including the development and manufacturing of new drugs and the medicinal preparations by medical institutions. The Drug Administration Law also regulates the distribution, packaging, labels and advertisements of pharmaceutical products in mainland China.
The Drug Administration Law and related implementing measures established the legal framework for the administration of pharmaceutical products, including the development and manufacturing of new drugs and the medicinal preparations by medical institutions. The Drug Administration Law also regulates the distribution, packaging, labels and -13- advertisements of pharmaceutical products in mainland China.
Zai Lab International Trading (Shanghai) Co., Ltd., an operating subsidiary of ours that is domiciled in mainland China, received RMB1.0 million in capital contributions via contributions from Zai Lab (Shanghai) Co., Ltd., its sole shareholder, in 2019 to fund its business operations in mainland China.
Zai Lab International Trading (Shanghai) Co., Ltd., an operating subsidiary of ours that is domiciled in mainland China, received RMB1.0 million in capital contributions via contributions from Zai Lab (Shanghai) Co., Ltd., its sole -23- shareholder, in 2019 to fund its business operations in mainland China.
The grant of such license is subject to annual inspection of the manufacturing facilities, production premises and facilities, equipment, hygiene conditions, production management, quality controls, product operation, raw material management, maintenance of sales records, and management of customer complaints and adverse event reports.
The grant of such license is subject to annual inspection of the -14- manufacturing facilities, production premises and facilities, equipment, hygiene conditions, production management, quality controls, product operation, raw material management, maintenance of sales records, and management of customer complaints and adverse event reports.
While participation in this process can -15- increase the reach and acceptance of our products, it can also result in significant negotiated reductions in the price paid for the products by hospitals or consortiums of hospitals bidding as a group.
While participation in this process can increase the reach and acceptance of our products, it can also result in significant negotiated reductions in the price paid for the products by hospitals or consortiums of hospitals bidding as a group.
We have suppliers in both China and the United States. • CROs: We may depend on certain CROs to support our clinical trials. Quality Control and Assurance We have established a strict quality control system in accordance with NMPA regulations.
We have suppliers in both China and the United States. • CROs: We may depend on certain CROs to support our clinical trials. -19- Quality Control and Assurance We have established a strict quality control system in accordance with NMPA regulations.
Our Manufacturing Facilities We operate two manufacturing facilities in Suzhou, China, which support the commercial and clinical production of certain of our products and product candidates, including ZEJULA. • We have a small molecule facility that manufactures ZEJULA.
Our Manufacturing Facilities We operate two manufacturing facilities in Suzhou, China, which support the commercial and clinical production of certain of our products and product candidates, including ZEJULA. -18- • We have a small molecule facility that manufactures ZEJULA.
Available Information We file reports and other information with the SEC and the Hong Kong Stock Exchange. We make available on our website our annual reports on Form 10-K, our quarterly reports on Form 10-Q, our current reports on Form 8-K, and all other SEC reports and amendments to those reports.
Available Information -24- We file reports and other information with the SEC and the Hong Kong Stock Exchange. We make available on our website our annual reports on Form 10-K, our quarterly reports on Form 10-Q, our current reports on Form 8-K, and all other SEC reports and amendments to those reports.
For our internally developed product candidates, we consider on a case-by- -12- case basis whether to procure patent rights to protect certain innovation pertaining to our commercial products, product candidates and technologies.
For our internally developed product candidates, we consider on a case-by-case basis whether to procure patent rights to protect certain innovation pertaining to our commercial products, product candidates, and technologies.
Our Commercial Products and Operations We currently have seven commercial programs with products that have received marketing approval and that we have commercially launched in one or more territories in Greater China. -1- The following table provides an overview of our partners and the approved indications and current geographic markets for our commercial products: Product Our Approved Indications Our Current Markets Partner 1L ovarian cancer maintenance treatment Platinum sensitive relapsed ovarian cancer maintenance treatment Mainland China, Hong Kong, and Macau gMG Mainland China gMG and CIDP CABP and ABSSSI Mainland China and Macau Newly diagnosed and recurrent GBM Greater China 4L GIST Greater China HABP and VABP caused by ABC Mainland China ROS1 + NSCLC Mainland China We have established a strong commercial infrastructure to support the sales of our commercial products.
Our Commercial Products and Operations We currently have seven commercial programs with products that have received marketing approval and that we have commercially launched in one or more territories in Greater China. -1- The following table provides an overview of our partners and the approved indications and current geographic markets for our commercial products: Product Our Approved Indications Our Current Markets Partner 1L ovarian cancer maintenance treatment Platinum sensitive relapsed ovarian cancer maintenance treatment Mainland China, Hong Kong, and Macau gMG Mainland China gMG and CIDP CABP and ABSSSI Mainland China and Macau Newly diagnosed and recurrent GBM Greater China 4L GIST Greater China HABP and VABP caused by ABC Mainland China ROS1 + NSCLC and NTRK+ solid tumors Greater China We have established a strong commercial infrastructure to support the sales of our commercial products.
Although we develop and maintain compliance protocols and controls designed to maintain compliance with these requirements, development, implementation, improvement, and maintenance of these protocols and controls is costly and requires significant effort, resources, and time.
Although we develop and maintain compliance protocols and controls designed to maintain compliance with these requirements, development, implementation, improvement, and maintenance of these protocols and controls is costly and requires -16- significant effort, resources, and time.
Pursuant to the terms of the agreement, we are responsible for (i) developing and commercializing the licensed products in the territory under a mutually agreed development plan; and (ii) providing Entasis (or its CRO) with clinical and financial support in the territory for the global pivotal Phase III ATTACK clinical trial of SUL-DUR as set forth in mutually agreed development plans.
Pursuant to the terms of the agreement, we are responsible for (i) developing and commercializing the licensed products in the territory under a mutually agreed development plan; and (ii) providing Entasis (or its CRO) with clinical and financial support in the territory for the global pivotal Phase 3 ATTACK clinical trial of SUL-DUR as set forth in mutually agreed development plans.
In addition to the NRDL, there is an evolving medical insurance system that makes innovative drugs more affordable and available to the Chinese population, which offers greater opportunities to drug manufacturers that focus on the research and development of innovative drugs, such as higher-cost cancer therapeutics. This system includes commercial health insurance and various forms of supplementary insurance.
In addition to the NRDL, there is an evolving medical insurance system that makes innovative drugs more affordable and available to the Chinese population, which offers greater opportunities to drug manufacturers that focus on the research and development of innovative drugs, such as higher-cost cancer therapeutics. This system includes commercial health insurance and various forms of supplemental insurance.
KarXT preferentially stimulates muscarinic receptors implicated in these conditions, as opposed to current antipsychotic medicines, which mostly target dopamine or serotonin receptors. KarXT has the potential to represent a new class of treatment for schizophrenia and ADP based on its differentiated mechanism of action.
KarXT preferentially stimulates muscarinic receptors implicated in these conditions, as opposed to current antipsychotic medicines, which mostly target dopamine or serotonin receptors. KarXT has the potential to represent a new class of treatment for schizophrenia based on its differentiated mechanism of action.
Zai Lab (Shanghai) Co., Ltd., an operating subsidiary of ours that is domiciled in mainland China, received $466.5 million in capital contributions via 24 separate contributions from Zai Lab (Hong Kong) Limited, its sole shareholder, domiciled outside of mainland China, from 2014 to 2024 to fund its business operations in mainland China.
Zai Lab (Shanghai) Co., Ltd., an operating subsidiary of ours that is domiciled in mainland China, received $466.5 million in capital contributions via 24 separate contributions from Zai Lab (Hong Kong) Limited, its sole shareholder, domiciled outside of mainland China, from 2014 to 2025 to fund its business operations in mainland China.
BMS (Xanomeline and Trospium Chloride) In November 2021, we entered into a license agreement with Karuna (a company later acquired by BMS), pursuant to which we agreed to collaboratively develop xanomeline and trospium chloride (KarXT) in Greater China. Under the agreement, we obtained an exclusive license to develop, manufacture, and commercialize xanomeline and trospium chloride in Greater China.
BMS (Xanomeline and Trospium Chloride) In November 2021, we entered into a license agreement with Karuna (a company later acquired by BMS), pursuant to which we agreed to collaboratively develop xanomeline and trospium chloride (KarXT or COBENFY) in Greater China. Under the agreement, we obtained an exclusive license to develop, manufacture, and commercialize xanomeline and trospium chloride in Greater China.
For example, we source VYVGART and VYVGART Hytrulo from argenx, OPTUNE from NovoCure, QINLOCK from Deciphera, XACDURO from Innoviva, AUGTYRO from BMS, bemarituzumab from Amgen, and TIVDAK from Pfizer. • Other Suppliers: We are dependent on third parties for certain raw materials in our supply chain.
For example, we source VYVGART and VYVGART Hytrulo from argenx, OPTUNE from NovoCure, QINLOCK from Deciphera, XACDURO from Innoviva, AUGTYRO from BMS, and TIVDAK from Pfizer. • Other Suppliers: We are dependent on third parties for certain raw materials in our supply chain.
Additional rules and regulations govern the process of procurement, storage, sales, and transportation. Coverage and Reimbursement Historically, most Chinese healthcare costs had been borne by patients out-of-pocket, which had limited the growth of more expensive pharmaceutical products. However, in recent years, the number of people covered by government and private insurance has increased.
Additional rules and regulations govern the process of procurement, storage, sales, and transportation. Coverage and Reimbursement Historically, most Chinese healthcare costs were borne by patients out-of-pocket, which limited the growth of more expensive pharmaceutical products. However, in recent years, the number of people covered by government and private insurance has increased.
We do not incorporate the information on or accessible through our website into this report, and you should not consider any information on, or that can be accessed through, our website as part of this report. -24-
We do not incorporate the information on or accessible through our website into this report, and you should not consider any information on, or that can be accessed through, our website as part of this report. -25-
We intend to leverage our competencies and resources to positively impact human health in Greater China and worldwide. To that end, our experienced team has secured partnerships with leading global biopharmaceutical companies to generate a broad pipeline, including multiple commercial products and multiple programs in late-stage clinical development.
We intend to leverage our competencies and resources to positively impact human health. To that end, our experienced team has secured partnerships with leading global biopharmaceutical companies to generate a broad pipeline, including multiple commercial products and multiple programs in late-stage clinical development.
To execute on that mission, we have developed a corporate strategy with the following three pillars to help us drive innovation in China and beyond: • Accelerate Medicines to Patients: We seek to advance our global and regional pipelines by continuing to invest in research and development activities; • Expand and Strengthen Our Pipeline: We seek to continue to expand and strengthen our differentiated global and regional pipelines through our internal discovery efforts and synergistic collaborations and corporate development activities; and • Continue Our Commercial Excellence and Execution: We seek to continue delivering strong financial performance, including by increasing access to our existing commercial products and driving further increases in our efficiency and productivity as we prepare to launch additional products or new indications for existing products, as we advance along our path to achieve profitability.
To execute on that mission, we have developed a corporate strategy with the following three pillars to help us drive innovation: • Accelerate Medicines to Patients: We seek to advance our global and regional pipelines by continuing to invest in research and development activities; • Expand and Strengthen Our Pipeline: We seek to continue to expand and strengthen our differentiated global and regional pipelines through our internal discovery efforts and synergistic collaborations and corporate development activities; and • Continue Our Commercial Excellence and Execution: We seek to continue delivering strong financial performance through increased access to our existing commercial products and further increases in our efficiency and productivity as we prepare to launch additional products or new indications for existing products, as we advance along our path to achieve profitability.
We are also responsible for a portion of the costs of the global pivotal Phase III ATTACK clinical trial of SUL-DUR outside of the licensed territory.
We are also responsible for a portion of the costs of the global pivotal Phase 3 ATTACK clinical trial of SUL-DUR outside of the licensed territory.
The facility has capacity to produce up to 50 million units per year for oral solid dosage form. • We have a large molecule facility for which we have successfully obtained permits and passed inspections to manufacture supplies for certain product candidates.
The facility has capacity to produce up to 50 million units per year for oral solid dosage form. • We have a large molecule facility for which we have successfully passed inspections to manufacture supplies for certain product candidates.
Our Pipeline of Product Candidates and R&D Activities We believe research and development is important to our future growth and ability to remain competitive, and we are dedicated to discovering or licensing, and then developing and commercializing, innovative products that address significant unmet medical needs in Greater China and worldwide.
Our Pipeline of Product Candidates and R&D Activities We believe research and development is important to our future growth and ability to remain competitive, and we are dedicated to discovering or licensing, and then developing and commercializing, innovative products that address significant unmet medical needs.
TIVDAK received full approval in the United States for this indication in April 2024 based on results from the global, randomized Phase III innovaTV 301 clinical trial, which met its primary endpoint of OS. The key -7- secondary endpoints of investigator-assessed progression-free survival and objective response rate also demonstrated statistical significance.
TIVDAK received full approval in the United States for this indication in April 2024 based on results from the global, randomized Phase 3 innovaTV 301 clinical trial, which met its primary endpoint of overall survival. The key secondary endpoints of investigator-assessed progression-free survival and objective response rate also demonstrated statistical significance.
The facility has a biological processing and formulation -18- production line with an annual production capacity of up to 12 to 22 clinical batches, each batch for 200L or 1000L. Our two manufacturing facilities comply with both the PRC and PIC/S drug manufacturing standards. We procure our manufacturing equipment from leading domestic and international suppliers.
The facility has a biological drug substance and drug product production line with an annual production capacity of up to 12 to 22 clinical batches, each batch for 200L or 1000L. Our two manufacturing facilities comply with both the PRC or PIC/S drug manufacturing standards. We procure our manufacturing equipment from leading domestic and international suppliers.
Our senior management team is actively involved in setting quality policies and managing the internal and external quality performance of the Company. -19- For information on risks related to our manufacturing and commercialization activities as well as our reliance on third parties, including our third-party partners, CMOs, and suppliers, see Risk Factors .
Our senior management team is actively involved in setting quality policies and managing the internal and external quality performance of the Company. For information on risks related to our manufacturing and commercialization activities as well as our reliance on third parties, including our third-party partners, CMOs, and suppliers, see Risk Factors . Competition Competition in the biopharmaceutical industry is intense.
Our Oncology Pipeline ZL-1310 (DLL3 ADC) ZL-1310 is a potential first-in-class and best-in-class next generation ADC targeting DLL3, an antigen that is overexpressed in many neuroendocrine tumors and is a validated therapeutic target for SCLC. ZL-1310 comprises a humanized anti-DLL3 monoclonal antibody linked to a novel camptothecin derivative (a topoisomerase 1 inhibitor) as its payload.
Our Oncology Pipeline Zocilurtatug Pelitecan (Zoci, DLL3-Targeting ADC) (formerly ZL-1310) Zoci is a potential first-in-class and best-in-class next generation ADC targeting DLL3, an antigen that is overexpressed in many neuroendocrine carcinomas and is a validated therapeutic target for SCLC. Zoci comprises a humanized anti-DLL3 monoclonal antibody linked to a novel camptothecin derivative (a topoisomerase 1 inhibitor) as its payload.
The oral solids production line is cGMP-compliant and is capable of performing the entire production process, including blending, granulation (i.e., wet granulation process, fluidized bed process, and roller compaction), tableting, coating, and packaging for oral solid drug products.
The oral solids production line is GMP-compliant and is capable of performing the entire production process, including blending, granulation (i.e., wet granulation process, fluidized bed process, and roller compaction), capsule filling, tableting, coating, and packaging for oral solid drug products.
In November 2024, we entered into a strategic collaboration with Pfizer that will allow us to leverage the industry-leading commercialization infrastructure of Pfizer’s affiliated companies in the anti-infective therapeutic area to support the early launch of XACDURO in mainland China. AUGTYRO (Repotrectinib) AUGTYRO is a next-generation TKI that targets ROS1 oncogenic fusions.
In November 2024, we entered into a strategic collaboration with Pfizer that allows us to leverage the industry-leading commercialization infrastructure of Pfizer’s affiliated companies in the anti-infective therapeutic area to support sales of XACDURO in mainland China. AUGTYRO (Repotrectinib) AUGTYRO is a next-generation TKI that targets ROS1 oncogenic fusions.
Deciphera (Ripretinib) In June 2019, we entered into a license agreement with Deciphera, pursuant to which we obtained an exclusive license under certain patents and know-how of Deciphera to develop and commercialize products containing ripretinib (QINLOCK) in the field of prevention, prophylaxis, treatment, cure, or amelioration of any disease or medical condition in humans in Greater China.
We will purchase the licensed products exclusively from NovoCure. -11- Deciphera (Ripretinib) In June 2019, we entered into a license agreement with Deciphera, pursuant to which we obtained an exclusive license under certain patents and know-how of Deciphera to develop and commercialize products containing ripretinib (QINLOCK) in the field of prevention, prophylaxis, treatment, cure, or amelioration of any disease or medical condition in humans in Greater China.
NUZYRA is locally manufactured by CMOs in mainland China. We have an exclusive promotion agreement with Huizheng, a subsidiary of Hanhui, one of the leading pharmaceutical companies for antibiotics in mainland China, which allows us to use Hanhui’s existing infrastructure for sales of NUZYRA in mainland China.
We have an exclusive promotion agreement with Huizheng, a subsidiary of Hanhui, one of the leading pharmaceutical companies for antibiotics in mainland China, which allows us to use Hanhui’s existing infrastructure for sales of NUZYRA in mainland China.
As a result of this designation, certain forms of financial assistance for development of ZL-1310 are available, and there is the potential, upon product approval, for the FDA to grant market exclusivity for a 7-year period.
As a result of this Orphan Drug Designation, certain forms of financial assistance for development of zoci are available, and there is the potential, upon product approval, for the FDA to grant market exclusivity for a 7-year period.
We launched the IV formulation of efgartigimod, under the brand name VYVGART, in mainland China in September 2023 as an add on to standard therapy for the treatment of adult patients with gMG who are AChR antibody positive, and in January 2024, this product was added to the NRDL for this indication.
We launched the IV formulation of efgartigimod, under the brand name VYVGART, in mainland China in September 2023 as an add on to standard therapy for the treatment of adult patients with gMG who are AChR antibody positive, and VYVGART has been included in the NRDL for this indication since January 2024.
We maintain liability insurance for certain clinical trials, which covers the patient human clinical trial liabilities such as bodily injury, product liability insurance, general insurance policies covering property loss due to accidents or natural disasters, and D&O insurance.
We maintain liability insurance for certain clinical trials, which covers the patient human clinical trial liabilities such as bodily injury, product liability insurance, general insurance policies covering property loss due to accidents or natural disasters, and D&O insurance. We do not maintain insurance to cover intellectual property infringement or misappropriation.
Price Negotiations The Chinese government has initiated several rounds of price negotiations with manufacturers of patented drugs, drugs with an exclusive source of supply, and oncology drugs since 2016. Once the government agreed with the drug manufacturers on the supply prices, the drugs would be automatically listed in the NRDL and qualified for public hospital purchase.
Price Negotiations The Chinese government has initiated several rounds of price negotiations with manufacturers of patented drugs, drugs with an exclusive source of supply, and oncology drugs. Once the government agrees with drug manufacturers on the supply prices, the drugs are automatically listed in the NRDL and qualified for public hospital purchase.
We retain no ownership control over the products sold to our distributors, and all significant risks (including inventory risks) and rewards associated with the products are generally transferred to our distributors upon delivery to and acceptance by the distributors.
We offer rebates to our distributors, consistent with pharmaceutical industry practice. We retain no ownership control over the products sold to our distributors, and all significant risks (including inventory risks) and rewards associated with the products are generally transferred to our distributors upon delivery to and acceptance by the distributors.
The current median survival of patients with metastatic pancreatic cancer is four to six months, and the five-year survival rate of pancreatic cancer is 7.2%. We expect to file for regulatory approval in China in the second half of 2025.
The current median survival of patients with metastatic pancreatic cancer is four to six months, and the five-year survival rate of pancreatic cancer is 7.2%. We filed for regulatory approval in China in the fourth quarter of 2025.
According to the NHSA, as of December 2023, approximately 1.33 billion residents in mainland China were enrolled in the Basic Medical Insurance scheme, representing a coverage rate of above 95% of the total population.
According to the NHSA, as of the end of 2024, approximately 1.33 billion residents in mainland China were enrolled in the Basic Medical Insurance scheme, representing a coverage rate remaining at 95% of the total population.
The compound was designed with a novel ADC technology platform called TMALIN ® , which leverages the tumor microenvironment to overcome challenges associated with first-generation ADC therapies, including off-target payload toxicity. We have an exclusive global license from MediLink to research, develop, manufacture, and commercialize ZL-1310 . We are evaluating ZL-1310 for the treatment of SCLC and other neuroendocrine tumors.
The compound was designed with a novel ADC technology platform called TMALIN ® , which leverages the tumor microenvironment to overcome challenges associated with first-generation ADC therapies, including off-target payload toxicity. We have an exclusive global license from MediLink to research, develop, manufacture, and commercialize zoci .
Further, under certain circumstances, a pharmaceutical company’s products may not be purchased by public medical institutions where that pharmaceutical company is involved in a criminal investigation or administrative proceedings related to bribery.
Competition Laws : Under Chinese laws governing competition, commercial bribery is prohibited and subject to criminal liability. Further, under certain circumstances, a pharmaceutical company’s products may not be purchased by public medical institutions where that pharmaceutical company is involved in a criminal investigation or administrative proceedings related to bribery.
We believe our long-term competitive position depends upon our success in discovering and developing innovative, cost-effective products that serve unmet medical needs, along with our ability to manufacture products efficiently and to launch and market them effectively in a highly competitive environment. For information on significant risks we face from competition, see Risk Factors .
We believe our long-term competitive position depends upon our success in discovering and developing innovative, cost-effective products that serve unmet medical needs, along with our ability to manufacture products efficiently and to launch and market them effectively in a highly competitive environment.
The number of full-time employees by function as of such date was as follows: By Function Number of Employees Research and Development 578 Commercial 1,090 Manufacturing 68 General and Administrative* 133 Total 1,869 * Includes finance, legal, human resources, information technology, and other general and administrative functions.
The number of full-time employees by function as of such date was as follows: By Function Number of Employees Research and Development 494 Commercial 1,095 Manufacturing 67 General and Administrative* 128 Total 1,784 * Includes finance, legal, human resources, information technology, and other general and administrative functions.
The NDA submission was supported by data from the Phase I PK study, Phase III China study, the global Phase III EMERGENT-2 and EMERGENT-3 clinical trials, and long-term follow-up results. This follows FDA approval of KarXT, under the brand name COBENFY, for the treatment of schizophrenia in adults in September 2024.
The NDA submission was supported by data from the Phase 1 PK study conducted in China, Phase 3 China study, and -9- three global Phase 3 EMERGENT clinical trials. This follows FDA approval of KarXT, under the brand name COBENFY, for the treatment of schizophrenia in adults in September 2024.
We launched AUGTYRO in mainland China in December 2024 for the treatment of adult patients with locally advanced or metastatic ROS1 + NSCLC, and AUGTYRO was included in the NRDL for this indication in January 2025.
We launched AUGTYRO in mainland China in December 2024 for the treatment of adult patients with locally advanced or metastatic ROS1 + NSCLC, and AUGTYRO has been included in the NRDL for this indication since January 2025. In December 2025, the NMPA approved the sNDA for AUGTYRO for the treatment of adult patients with NTRK + solid tumors.
As of January 31, 2025, we had 1,869 full-time employees, of which 1,799 were located in Greater China.
As of January 31, 2026, we had 1,784 full-time employees, of which 1,710 were located in Greater China.
We launched QINLOCK in mainland China in 2021 for the treatment of adult patients with advanced GIST who have received prior treatment with three or more kinase inhibitors, including imatinib, or 4L GIST. QINLOCK was first included in the NRDL for this indication in January 2023. The NRDL listing for this indication was renewed in January 2025.
We launched QINLOCK in mainland China in 2021 for the treatment of adult patients with advanced GIST who have received prior treatment with three or more kinase inhibitors, including imatinib, or 4L GIST. QINLOCK has been included in the NRDL for this indication since January 2023. We have also launched QINLOCK for 4L GIST in Hong Kong, Taiwan, and Macau.
We are evaluating significant additional indications for efgartigimod SC and the pre-filled syringe, including for the treatment of thyroid eye disease, myositis, seronegative gMG, ocular MG, and lupus nephritis. • TED: We are participating in the Greater China portion of the global registrational Phase III UplighTED study of efgartigimod for the treatment of TED.
We are also evaluating significant additional indications for efgartigimod SC and the pre-filled syringe, including for the treatment of Sjogren ’ s disease, myositis, seronegative gMG, and ocular MG. • Sjogren ’ s Disease: We are participating in the Greater China portion of the global registrational Phase 3 UNITY study of efgartigimod for the treatment of Sjogren ’s disease .
We do not maintain insurance to cover intellectual property infringement or misappropriation. -20- Human Capital Resources Our employees are integral to our success, and we are committed to building and maintaining a strong and engaged workforce that is focused on delivering on our mission to become a leading global biopharmaceutical company and to positively impact human health in China and beyond.
Human Capital Resources Our employees are integral to our success, and we are committed to building and maintaining a strong and engaged workforce that is focused on delivering on our mission to become a leading global biopharmaceutical company and to positively impact human health.
In November 2024, the NMPA approved the sBLA for VYVGART Hytrulo for the treatment of adult patients with CIDP, and we launched VYVGART Hytrulo for this indication in the fourth quarter of 2024. There are approximately 50,000 patients diagnosed with CIDP in mainland China.
We launched the subcutaneous formulation of efgartigimod, under the brand name VYVGART Hytrulo, for this indication in mainland China in the fourth quarter of 2024. In the fourth quarter of 2024, we also launched VYVGART Hytrulo for the treatment of adult patients with CIDP. There are approximately 50,000 patients diagnosed with CIDP in mainland China.
Insurance We maintain insurance policies that are required under Chinese laws and regulations as well as based on our assessment of our operational needs and industry practice.
For information on significant risks we face from competition, see Risk Factors . -20- Insurance We maintain insurance policies that are required under Chinese laws and regulations as well as based on our assessment of our operational needs and industry practice.
Some of our competitors may have substantially greater financial, marketing, research and development, and other resources than we do. We believe that competition and leadership in the industry is based on managerial and technological excellence and innovation as well as established patent and other proprietary positions through research and development.
We believe that competition and leadership in the industry is based on managerial and technological excellence and innovation as well as established patent and other proprietary positions through research and development.
These agreements also contain customary provisions for termination by either party, including in the event of a material breach by the other party that remains uncured; by us for convenience upon a specified notice period; for certain bankruptcy, insolvency, or other similar events; and by our partners upon challenge of their licensed patent rights.
These agreements also contain customary provisions for termination by either party, including in the event of a material breach by the other party that remains uncured; by us for convenience upon a specified notice period; for certain bankruptcy, insolvency, or other similar events; and by our partners upon challenge of their licensed patent rights. -10- The following sections provide additional information on the license and collaboration arrangements for our commercial products and significant product candidates, such as the scope of the licensed products and licensed territories and any related supply arrangements.
In mainland China, Acinetobacter baumannii infections are often seen in the hospital setting. Based on the 2022 Annual Report of CARSS (China Antimicrobial Resistance Surveillance System), there were around 300,000 Acinetobacter infections reported in mainland China in 2022.
For carbapenem-resistant Acinetobacter baumannii infections, -4- treatment options are extremely limited because remaining antibiotics are either toxic or of limited efficacy. In mainland China, Acinetobacter baumannii infections are often seen in the hospital setting. Based on the 2022 Annual Report of CARSS (China Antimicrobial Resistance Surveillance System), there were around 300,000 Acinetobacter infections reported in mainland China in 2022.
We estimate that there are around 25,000 patients diagnosed with sn-gMG in China. • Ocular MG: We are currently supporting enrollment in Greater China for the global registrational Phase III ADAPT-OCULUS study of efgartigimod for the treatment of ocular MG.
We estimate that there are around 25,000 patients diagnosed with sn-gMG in China. • Ocular MG: In February 2026, our partner argenx announced topline results from the global registrational Phase 3 ADAPT-OCULUS study of efgartigimod for the treatment of ocular MG.
The following table provides an overview of our key regional product candidates, including key indications we are evaluating for those products, their clinical stage and related studies in which we are participating, and our partners and potential geographic markets : Product Description Potential Indications and Clinical Stage (Studies) Our Potential Markets Partner Oncology Pipeline Bemarituzumab Anti-FGFR2b antibody 1L Gastric/GEJ Cancer – Phase III (FORTITUDE-101 and FORTITUDE-102) Greater China Five Prime (now owned by Amgen) Tumor Treating Fields Portable device for delivery of electric fields 2L+ NSCLC – Phase III (LUNAR) Pancreatic Cancer – Phase III (PANOVA-3) Greater China NovoCure Tisotumab vedotin (TIVDAK) Tissue Factor ADC 2L+ Cervical Cancer – Phase III (innovaTV 301) 1L r/m Cervical Cancer - Phase II (innovaTV 205) Greater China Seagen (now owned by Pfizer) Repotrectinib (AUGTYRO) TKI targeting ROS1 oncogenic fusions NTRK + Solid Tumors – Phase I/II (TRIDENT-1) Greater China Turning Point (now owned by BMS) Immunology, Neuroscience, and Infectious Disease Pipeline Efgartigimod (VYVGART, VYVGART Hytrulo, Pre-Filled Syringe) FcRn blocker TED – Phase III (UplighTED) Myositis - Phase III (ALKIVIA) sn-gMG - Phase III (ADAPT-SERON) Ocular MG - Phase III (ADAPT-OCULUS) LN - Phase II Greater China argenx Xanomeline and Trospium Chloride (COBENFY, KarXT) Combination of muscarinic receptor agonist and antimuscarinic agent Schizophrenia – Phase III (EMERGENT) ADP – Phase III (ADEPT-2 and ADEPT-3) Greater China Karuna (now owned by BMS) The following sections include more information on significant product candidates in our oncology and immunology, neuroscience, and infectious disease pipelines.
The following table provides an overview of our key regional product candidates, including key indications we are evaluating for those products, their clinical stage and related studies in which we are participating, and our partners and potential geographic markets : Product Description Potential Indications and Clinical Stage (Studies) Our Potential Markets Partner Oncology Pipeline Tumor Treating Fields Portable device for delivery of electric fields Pancreatic Cancer – Phase III (PANOVA-3) Greater China NovoCure Tisotumab vedotin (TIVDAK) Tissue Factor ADC 2L+ Cervical Cancer – Phase 3 (innovaTV 301) 1L r/m Cervical Cancer - Phase 2 (innovaTV 205) Greater China Seagen (now owned by Pfizer) Immunology, Neuroscience, and Infectious Disease Pipeline Efgartigimod (VYVGART, VYVGART Hytrulo, Pre-Filled Syringe) FcRn blocker Sjogren’s – Phase 3 (UNITY) Myositis - Phase 3 (ALKIVIA) sn-gMG - Phase 3 (ADAPT-SERON) Ocular MG - Phase 3 (ADAPT-OCULUS) Greater China argenx -6- Xanomeline and Trospium Chloride (KarXT) Combination of muscarinic receptor agonist and antimuscarinic agent Schizophrenia – Phase 3 (EMERGENT); approved by the NMPA in December 2025 Greater China Karuna (now owned by BMS) Povetacicept Fc fusion protein that enhances inhibition of APRIL and BAFF IgAN – Phase 3 (RAINIER) pMN – Phase 2/3 (OLYMPUS) Greater China and Singapore Vertex Elegrobart Immunoglobulin G1-K monoclonal antibody targeting IGF-1R TED – Phase 3 (Phase 3 Bridging Study in Greater China) Greater China Zenas The following sections include more information on significant product candidates in our oncology and immunology, neuroscience, and infectious disease pipelines.
We estimate that there are around 1 million patients with moderate to severe TED in China. • Myositis: We are participating in the Greater China portion of the global registrational Phase II/III ALKIVIA study of efgartigimod for the treatment of idiopathic inflammatory myopathies, or myositis.
We estimate that there are around 2.3 million patients with Sjogren ’s disease in China. • Myositis: We are participating in the Greater China portion of the global registrational Phase 2/3 ALKIVIA study of efgartigimod for the treatment of myositis, also known as idiopathic inflammatory myopathies.
We have an exclusive license from Entasis (now a wholly owned subsidiary of Innoviva) to develop and commercialize SUL-DUR in Asia Pacific. -4- Our primary market for XACDURO is patients with HABP and VABP caused by ABC in mainland China. Acinetobacter belongs to a group of bacteria commonly found in the environment, such as soil and water.
XACDURO (Sulbactam/Durlobactam or SUL-DUR) XACDURO is a combination of a beta-lactam antibiotic (sulbactam) and a beta-lactamase inhibitor (durlobactam). We have an exclusive license from Entasis (now a wholly owned subsidiary of Innoviva) to develop and commercialize SUL-DUR in Asia Pacific. Our primary market for XACDURO is patients with HABP and VABP caused by ABC in mainland China.
In December 2024, we and NovoCure announced that the PANOVA-3 trial met its primary endpoint, demonstrating a statistically significant improvement in mOS versus control group. According to the World Health Organization, pancreatic cancer was the eighth-leading cancer type in China in 2020. There are approximately 134,000 new cases of pancreatic cancer diagnosed each year in China.
The trial met its primary endpoint, demonstrating a statistically significant improvement in median overall survival for patients treated with TTFields. According to the World Health Organization, pancreatic cancer was the eighth-leading cancer type in China in 2020. There are approximately 134,000 new cases of pancreatic cancer diagnosed each year in China.
Competition Competition in the biopharmaceutical industry is intense. There are many companies, including biotechnology and pharmaceutical companies, engaged in developing products for the approved indications of our commercial products and the therapeutic areas we are targeting with our research and development activities.
There are many companies, including biotechnology and pharmaceutical companies, engaged in developing products for the approved indications of our commercial products and the therapeutic areas we are targeting with our research and development activities. Some of our competitors may have substantially greater financial, marketing, research and development, and other resources than we do.
We are proud of the diversity, skills, and achievements that our employees bring to our business from various parts of the world.
We seek to bring together employees with different backgrounds and expertise while also creating an inclusive culture. We are proud of the diversity, skills, and achievements that our employees bring to our business from various parts of the world.
COBENFY does not have atypical antipsychotic class warnings and precautions and does not have a boxed warning. We estimate that there are more than 8 million people living with schizophrenia in China. -9- • ADP: We are participating in the China portion of the global Phase III ADEPT-2 and ADEPT-3 trials in ADP.
COBENFY does not have atypical antipsychotic class warnings and precautions and does not have a boxed warning. We expect to commercially launch KarXT in China in the first half of 2026. We estimate that there are more than 8 million people living with schizophrenia in China.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeIf in the future our Chinese subsidiaries do not receive or maintain required approvals, such as because we inadvertently conclude that approvals are not required or because of changes in applicable laws and regulations or interpretations of such laws and regulations, the operations of our Chinese subsidiaries, and as a result our business, results of operations, financial condition, and prospects, could be adversely affected.
Biggest changeIf in the future our Chinese subsidiaries do not receive or maintain required approvals, such as because we inadvertently conclude that approvals are not required or because of changes in applicable laws and regulations or interpretations of such laws and regulations, the operations of our Chinese subsidiaries, and as a result our business, results of operations, financial condition, and prospects, could be adversely affected, and the value of our securities could significantly decline or become worthless. -30- Under Chinese laws and regulations, we may be required by the CSRC or other Chinese regulatory authorities to obtain approval or follow certain procedures to issue our securities to foreign investors, and we cannot predict whether or when we will be able to obtain such approval or complete such procedures.
To date, we have financed our activities primarily through revenues from the sales of our commercial products and offerings on Nasdaq and the Hong Kong Stock Exchange, including a registered offering of our ADSs in November 2024, as well as private placements.
To date, we have financed our activities primarily through revenues from the sales of our commercial products and offerings on Nasdaq and the Hong Kong Stock Exchange, including a registered offering of our ADSs in November 2024, as well as private placements.
We may experience delays in completing our pre-clinical or clinical trials, and numerous unforeseen events could arise during, or as a result of, such clinical trials, which could delay or prevent us from receiving regulatory approval, including: • regulators or institutional review boards, or IRBs, or ethics committees may not authorize us or our investigators to commence or conduct a clinical trial at a prospective trial site; • we may experience delays in reaching, or may fail to reach, agreement on acceptable terms with prospective trial sites and prospective CROs who conduct clinical trials on our behalf, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and trial sites; -44- • clinical trials may produce negative or inconclusive results, and we may decide, or regulators may require us, to conduct additional clinical trials or we may decide to abandon product development programs; • the number of patients required for clinical trials of our products and product candidates may be larger than we anticipate, enrollment in these clinical trials may be slower than we anticipate, or participants may drop out of these clinical trials or fail to return for post-treatment follow-up at a higher rate than we anticipate; • third-party contractors used in our clinical trials may fail to comply with regulatory requirements or meet their contractual obligations in a timely manner, or at all, or may deviate from the clinical trial protocol or drop out of the trial, which may require that we add new clinical trial sites or investigators; • we may not be able to conduct a companion diagnostic test to identify patients who are likely to benefit from our products and product candidates in a timely manner or at all; • we may elect to, or regulators, IRBs or ethics committees may require that we or our investigators, suspend or terminate clinical research for various reasons, including non-compliance with regulatory requirements or a finding that participants are being exposed to unacceptable health risks; • the cost of clinical trials may be greater than we anticipate; • the supply or quality of our product candidates or other materials necessary to conduct clinical trials may be insufficient or inadequate; and • our products and product candidates may have undesirable side effects or unexpected characteristics, causing us or our investigators, regulators, IRBs, or ethics committees to suspend or terminate the trials, or reports may arise from pre-clinical or clinical testing of other therapies that raise safety or efficacy concerns about our products and product candidates.
We may experience delays in completing our pre-clinical or clinical trials, and numerous unforeseen events could arise during, or as a result of, such clinical trials, which could delay or prevent us from receiving regulatory approval, including: • regulators or institutional review boards, or IRBs, or ethics committees may not authorize us or our investigators to commence or conduct a clinical trial at a prospective trial site; • we may experience delays in reaching, or may fail to reach, agreement on acceptable terms with prospective trial sites and prospective CROs who conduct clinical trials on our behalf, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and trial sites; • clinical trials may produce negative or inconclusive results, and we may decide, or regulators may require us, to conduct additional clinical trials or we may decide to abandon product development programs; • the number of patients required for clinical trials of our products and product candidates may be larger than we anticipate, enrollment in these clinical trials may be slower than we anticipate, or participants may drop out of these clinical trials or fail to return for post-treatment follow-up at a higher rate than we anticipate; • third-party contractors used in our clinical trials may fail to comply with regulatory requirements or meet their contractual obligations in a timely manner, or at all, or may deviate from the clinical trial protocol or drop out of the trial, which may require that we add new clinical trial sites or investigators; • we may not be able to conduct a companion diagnostic test to identify patients who are likely to benefit from our products and product candidates in a timely manner or at all; • we may elect to, or regulators, IRBs or ethics committees may require that we or our investigators, suspend or terminate clinical research for various reasons, including non-compliance with regulatory requirements or a finding that participants are being exposed to unacceptable health risks; • the cost of clinical trials may be greater than we anticipate; • the supply or quality of our product candidates or other materials necessary to conduct clinical trials may be insufficient or inadequate; and • our products and product candidates may have undesirable side effects or unexpected characteristics, causing us or our investigators, regulators, IRBs, or ethics committees to suspend or terminate the trials, or reports may arise from pre-clinical or clinical testing of other therapies that raise safety or efficacy concerns about our products and product candidates.
The degree of market acceptance of our commercial products among physicians, patients, healthcare payors, and the medical community may depend on a number of factors, including: • acceptable evidence of safety and efficacy; • relative convenience and ease of administration; • prevalence and severity of any adverse side effects; • availability of alternative treatments; • pricing, cost effectiveness, and value propositions; • effectiveness of our sales and marketing capabilities and strategies; • ability to obtain sufficient insurance coverage and reimbursement; • the clinical indications for which such product are approved, as well as changes in the standard of care for their targeted indications; • the effectiveness of manufacturing and supply chain; • warnings and limitations contained in the approved labeling; • safety concerns with respect to similar or competing products marketed by others; • our ability to comply with regulatory post-marketing requirements; • the market size for such product, which may be larger or smaller than expected; • entry timing and price for any competing products; and • our ability to manage complications or barriers that inhibit our commercial team from reaching the appropriate audience to promote our product(s), such as because of government actions or business disruptions caused by public health crises, natural disasters, extreme weather events, and other significant or catastrophic events.
The degree of market acceptance of our commercial products among physicians, patients, healthcare payors, and the medical community may depend on a number of factors, including: • acceptable evidence of safety and efficacy; • relative convenience and ease of administration; • prevalence and severity of any adverse side effects; • availability of alternative treatments; • pricing, cost effectiveness, and value propositions; • effectiveness of our sales and marketing capabilities and strategies; • ability to obtain sufficient insurance coverage and reimbursement; • the clinical indications for which such product are approved, as well as changes in the standard of care for their targeted indications; • the effectiveness of manufacturing and supply chain; • warnings and limitations contained in the approved labeling; • safety concerns with respect to similar or competing products marketed by others; -41- • our ability to comply with regulatory post-marketing requirements; • the market size for such product, which may be larger or smaller than expected; • entry timing and price for any competing products; and • our ability to manage complications or barriers that inhibit our commercial team from reaching the appropriate audience to promote our product(s), such as because of government actions or business disruptions caused by public health crises, natural disasters, extreme weather events, and other significant or catastrophic events.
Our future capital requirements will depend on many factors, including: -36- • revenues from our approved commercial products and related product costs; • the cost and timing of future commercialization activities for our products and any other product candidates for which we receive regulatory approval; • the cost, timing, and outcome of seeking, obtaining, and maintaining regulatory approval for our products and product candidates; • the scope, progress, timing, results, and costs of researching and developing our product candidates, including additional indications for our existing commercial products, and conducting pre-clinical and clinical trials; • our ability to establish and maintain strategic partnerships, including collaboration, licensing, or other arrangements and the economic and other terms, timing, and success of such arrangements, such as with respect to any upfront fees, development and regulatory milestones that may be payable prior to commercialization or before we have generated revenue from the related product, and sales-based milestones or royalty payments that may be payable after commercial launch; • the cost, timing, and outcome of preparing, filing, and prosecuting patent applications, maintaining and enforcing our intellectual property rights, and defending any intellectual property related claims; • cash requirements of any future acquisitions; • resources and costs required to promote compliance with applicable laws and regulations by us and our third-party partners; • costs of our personnel; and • the costs of operating as a public company in both the United States and Hong Kong.
Our future capital requirements will depend on many factors, including: • revenues from our approved commercial products and related product costs; • the cost and timing of future commercialization activities for our products and any other product candidates for which we receive regulatory approval; • the cost, timing, and outcome of seeking, obtaining, and maintaining regulatory approval for our products and product candidates; • the scope, progress, timing, results, and costs of researching and developing our product candidates, including additional indications for our existing commercial products, and conducting pre-clinical and clinical trials; • our ability to establish and maintain strategic partnerships, including collaboration, licensing, or other arrangements and the economic and other terms, timing, and success of such arrangements, such as with respect to any upfront fees, development and regulatory milestones that may be payable prior to commercialization or before we have generated revenue from the related product, and sales-based milestones or royalty payments that may be payable after commercial launch; • the cost, timing, and outcome of preparing, filing, and prosecuting patent applications, maintaining and enforcing our intellectual property rights, and defending any intellectual property related claims; • cash requirements of any future acquisitions; • resources and costs required to promote compliance with applicable laws and regulations by us and our third-party partners; • costs of our personnel; and • the costs of operating as a public company in both the United States and Hong Kong.
Moreover, international business relationships subject us to additional risks that may materially adversely affect our business, including: -49- • difficulty of effective enforcement of contractual provisions in other jurisdictions; • potential third-party patent rights or potentially reduced protection for intellectual property rights; • unexpected changes in tariffs, trade barriers and regulatory requirements, including the loss of normal trade status between mainland China and the United States; • economic weakness, including inflation; • compliance with tax, employment, immigration, and labor laws for employees traveling abroad; • the effects of applicable foreign tax structures and potentially adverse tax consequences; • currency fluctuations, which could result in increased operating expenses and reduced revenue; • workforce uncertainty and labor unrest; • failure of our employees and contracted third parties to comply with anti-bribery laws in mainland China, Office of Foreign Asset Control rules and regulations and the FCPA and other anti-bribery and corruption laws; and • business interruptions resulting from geopolitical actions, including trade disputes, public health crises, international war or conflict, natural disasters, extreme weather events, and other significant or catastrophic events outside of our control.
Moreover, international business relationships subject us to additional risks that may materially adversely affect our business, including: • difficulty of effective enforcement of contractual provisions in other jurisdictions; • potential third-party patent rights or potentially reduced protection for intellectual property rights; • unexpected changes in tariffs, trade barriers and regulatory requirements, including the loss of normal trade status between mainland China and the United States; • economic weakness, including inflation; • compliance with tax, employment, immigration, and labor laws for employees traveling abroad; • the effects of applicable foreign tax structures and potentially adverse tax consequences; • currency fluctuations, which could result in increased operating expenses and reduced revenue; • workforce uncertainty and labor unrest; • failure of our employees and contracted third parties to comply with anti-bribery laws in mainland China, Office of Foreign Asset Control rules and regulations and the FCPA and other anti-bribery and corruption laws; and • business interruptions resulting from geopolitical actions, including trade disputes, public health crises, international war or conflict, natural disasters, extreme weather events, and other significant or catastrophic events outside of our control.
Our product candidates could be delayed in receiving, or fail to receive, regulatory approval for many reasons, including the following: • disagreement regarding the number, design, size, conduct, or implementation of our clinical trials; • failure to demonstrate to the satisfaction of the regulator(s) that a product candidate is safe and effective for its proposed indication, including as a result of safety issues, product recalls, or other incidents related to products approved and marketed in other jurisdictions; • failure of CROs, clinical study sites, or investigators to comply with the ICH-good clinical practice, or GCP, requirements imposed by the regulator(s); • failure of the clinical trial results to meet the required level of statistical significance; -39- • failure to demonstrate that clinical and other benefits outweigh safety risks; • disagreement regarding the interpretation of data from pre-clinical studies or clinical trials; • insufficient data collected from clinical trials to support the submission of an NDA, PMA, or other submission required to obtain regulatory approval in Greater China, the United States, the EU, or elsewhere; • failure to obtain approval of the manufacturing processes for our clinical and commercial supplies; • changes in the approval policies or regulations; and • actions by our CROs or licensors that materially and adversely affect the clinical trials.
Our product candidates could be delayed in receiving, or fail to receive, regulatory approval for many reasons, including the following: • disagreement regarding the number, design, size, conduct, or implementation of our clinical trials; • failure to demonstrate to the satisfaction of the regulator(s) that a product candidate is safe and effective for its proposed indication, including as a result of safety issues, product recalls, or other incidents related to products approved and marketed in other jurisdictions; • failure of CROs, clinical study sites, or investigators to comply with the ICH-good clinical practice, or GCP, requirements imposed by the regulator(s); • failure of the clinical trial results to meet the required level of statistical significance; • failure to demonstrate that clinical and other benefits outweigh safety risks; • disagreement regarding the interpretation of data from pre-clinical studies or clinical trials; • insufficient data collected from clinical trials to support the submission of an NDA, PMA, or other submission required to obtain regulatory approval in Greater China, the United States, the EU, or elsewhere; • failure to obtain approval of the manufacturing processes for our clinical and commercial supplies; • changes in the approval policies or regulations; and • actions by our CROs or licensors that materially and adversely affect the clinical trials.
If these third parties do not successfully carry out their contractual duties or meet expected deadlines, we may not be able to obtain regulatory approval for or commercialize our products or product candidates, on the anticipated timeline or at all, and our business could be substantially harmed; • If we are unable to obtain and maintain intellectual property protection for our products and product candidates (e.g., through patent property rights), or if the scope of such intellectual property rights obtained is not sufficiently broad, third parties may compete directly against us; -25- • We may not be able to protect our systems and networks, or the confidentiality of our confidential or other information (including personal information), from cyberattacks and other unauthorized access, disclosure, and disruption, which may materially and adversely affect us; • The pre-approval of, filing, or other procedures with the CSRC or other Chinese regulatory authorities may be required in connection with issuing securities to foreign investors under Chinese law, and, if required, we cannot predict whether or when we will be able to obtain such approval or complete such filing or other procedures; • We may be exposed to liabilities under the FCPA and Chinese anti-corruption laws, and any determination that we have violated these laws could have a material adverse effect on our business or reputation; • Certain of our investments may be subject to CFIUS review, which may delay or block a transaction from closing; • Restrictions on currency exchange may limit our ability to receive and use financing in foreign currencies; • We may rely on dividends and other distributions on equity paid by our Chinese subsidiaries to fund any cash and financing requirements we may have, and any limitation on the ability of our Chinese subsidiaries to make payments to Zai Lab Limited could have a material and adverse effect on our ability to conduct our business; • Chinese regulations relating to the establishment of offshore special purpose companies by residents in mainland China may subject our China resident beneficial owners or our wholly foreign-owned subsidiaries in mainland China to liability or penalties, limit our ability to inject capital into these subsidiaries, limit these subsidiaries’ ability to increase their registered capital or distribute profits to us, or may otherwise adversely affect us; • Chinese regulations establish complex procedures for some acquisitions of mainland China based companies by foreign investors, which could make it more difficult for us to pursue growth through acquisitions in mainland China; • It may be difficult to enforce against us or our management in mainland China any judgments obtained from foreign courts or for overseas regulators to conduct investigations or collect evidence within mainland China; and • Our business benefits from certain financial incentives and discretionary policies granted by local governments.
If these third parties do not successfully carry out their contractual duties or meet expected deadlines, we may not be able to obtain regulatory approval for or commercialize our products or product candidates, on the anticipated timeline or at all, and our business could be substantially harmed; • If we are unable to obtain and maintain intellectual property protection for our products and product candidates (e.g., through patent property rights), or if the scope of such intellectual property rights obtained is not sufficiently broad, third parties may compete directly against us; -26- • We may not be able to protect our systems and networks, or the confidentiality of our confidential or other information (including personal information), from cyberattacks and other unauthorized access, disclosure, and disruption, which may materially and adversely affect us; • The pre-approval of, filing, or other procedures with the CSRC or other Chinese regulatory authorities may be required in connection with issuing securities to foreign investors under Chinese law, and, if required, we cannot predict whether or when we will be able to obtain such approval or complete such filing or other procedures; • We may be exposed to liabilities under the FCPA and Chinese anti-corruption laws, and any determination that we have violated these laws could have a material adverse effect on our business or reputation; • Certain of our investments may be subject to CFIUS review, which may delay or block a transaction from closing; • Restrictions on currency exchange may limit our ability to receive and use financing in foreign currencies; • We may rely on dividends and other distributions on equity paid by our Chinese subsidiaries to fund any cash and financing requirements we may have, and any limitation on the ability of our Chinese subsidiaries to make payments to Zai Lab Limited could have a material and adverse effect on our ability to conduct our business; • Chinese regulations relating to the establishment of offshore special purpose companies by residents in mainland China may subject our China resident beneficial owners or our wholly foreign-owned subsidiaries in mainland China to liability or penalties, limit our ability to inject capital into these subsidiaries, limit these subsidiaries’ ability to increase their registered capital or distribute profits to us, or may otherwise adversely affect us; • Chinese regulations establish complex procedures for some acquisitions of mainland China based companies by foreign investors, which could make it more difficult for us to pursue growth through acquisitions in mainland China; • It may be difficult to enforce against us or our management in mainland China any judgments obtained from foreign courts or for overseas regulators to conduct investigations or collect evidence within mainland China; and • Our business benefits from certain financial incentives and discretionary policies granted by local governments.
If we are found to have infringed a third party’s patent rights, and we are unsuccessful in demonstrating that such patent(s) are invalid or unenforceable, we could be required to: • obtain royalty-bearing licenses from such third party to the relevant patent(s), which may not be available on commercially reasonable terms, require substantial licensing and royalty payments, or may not be available at all, and even if we were able to obtain such licenses, they could be non-exclusive, thereby giving our competitors and other third parties access to the same technologies licensed to us; • defend against additional litigation or administrative proceedings in the same and/or other jurisdiction(s); • reformulate affected product(s) so that they do not infringe the intellectual property rights of others, which may not be possible or could be expensive and time consuming; • cease developing, manufacturing, and commercializing any infringing products, product candidates, or technologies; and • pay such third party significant monetary damages, including treble damages and attorneys’ fees, if we are found to have willfully infringed their patent.
If we are found to have infringed a third party’s patent rights, and we are unsuccessful in demonstrating that such patent(s) are invalid or unenforceable, we could be required to: • obtain royalty-bearing licenses from such third party to the relevant patent(s), which may not be available on commercially reasonable terms, require substantial licensing and royalty payments, or may not be available at all, and even if we were able to obtain such licenses, they could be non-exclusive, thereby giving our competitors and other third parties access to the same technologies licensed to us; • defend against additional litigation or administrative proceedings in the same and/or other jurisdiction(s); • reformulate affected product(s) so that they do not infringe the intellectual property rights of others, which may not be possible or could be expensive and time consuming; -63- • cease developing, manufacturing, and commercializing any infringing products, product candidates, or technologies; and • pay such third party significant monetary damages, including treble damages and attorneys’ fees, if we are found to have willfully infringed their patent.
For example: • others may be able to make products that are similar to our products or product candidates or utilize similar technology that are not covered by the claims of the patents that we hold rights to; • patent rights we currently hold or that we may hold in the future might be from inventors that are not the first to file patent applications covering such inventions; • others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing, misappropriating, or otherwise violating our intellectual property rights; • patent rights we currently hold to any patent applications that are pending or such patent applications that we may hold patent rights to in the future may not result in issued patents; • issued patents that we hold rights to may be held invalid or unenforceable; -64- • our competitors might conduct research and development activities in countries where we do not have patent rights and then use the information learned from such activities to develop competitive products for sale in our major commercial markets; • we may not develop additional proprietary technologies that are patentable; • the patents of others may impede our ability to exploit our innovations and may harm our business; and • we may choose to maintain certain trade secrets or know-how, and a third party may discover such trade secrets or know-how through independent research and development, which may harm our business.
For example: • others may be able to make products that are similar to our products or product candidates or utilize similar technology that are not covered by the claims of the patents that we hold rights to; • patent rights we currently hold or that we may hold in the future might be from inventors that are not the first to file patent applications covering such inventions; • others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing, misappropriating, or otherwise violating our intellectual property rights; • patent rights we currently hold to any patent applications that are pending or such patent applications that we may hold patent rights to in the future may not result in issued patents; • issued patents that we hold rights to may be held invalid or unenforceable; • our competitors might conduct research and development activities in countries where we do not have patent rights and then use the information learned from such activities to develop competitive products for sale in our major commercial markets; • we may not develop additional proprietary technologies that are patentable; • the patents of others may impede our ability to exploit our innovations and may harm our business; and • we may choose to maintain certain trade secrets or know-how, and a third party may discover such trade secrets or know-how through independent research and development, which may harm our business.
The market price of our securities has been volatile, and will likely continue to be volatile and subject to wide fluctuations in response to a variety of factors, including the following: • announcements of competitive developments; -65- • regulatory developments affecting us, our licensors and partners, our customers, or our competitors; • announcements regarding litigation or administrative proceedings involving us or our licensors and partners; • actual or anticipated fluctuations in our period-to-period operating results; • changes in financial estimates by securities research analysts; • additions or departures of our executive officers; • fluctuations of exchange rates between the RMB and the U.S. dollar; • release or expiration of lock-up or other transfer restrictions on our outstanding securities; and • sales or perceived sales of additional securities.
The market price of our securities has been volatile, and will likely continue to be volatile and subject to wide fluctuations in response to a variety of factors, including the following: • announcements of competitive developments; • regulatory developments affecting us, our licensors and partners, our customers, or our competitors; • announcements regarding litigation or administrative proceedings involving us or our licensors and partners; • actual or anticipated fluctuations in our period-to-period operating results; • changes in financial estimates by securities research analysts; • additions or departures of our executive officers; • fluctuations of exchange rates between the RMB and the U.S. dollar; • release or expiration of lock-up or other transfer restrictions on our outstanding securities; and • sales or perceived sales of additional securities.
Such authorities may impose a suspension or termination due to a number of factors, including: a failure to conduct the clinical trial in accordance with regulatory requirements or the applicable clinical protocols; a failure to obtain the regulatory approval and/or complete record filings with respect to the collection, preservation, use, and export of mainland China’s human genetic resources; inspection of the clinical trial operations or trial site by the NMPA, FDA, or other regulatory authorities that results in the imposition of a clinical hold, unforeseen safety issues, or adverse side effects; failure to demonstrate a benefit from using a product candidate; changes in government regulations or administrative actions; or lack of adequate funding to continue the clinical trial.
Such authorities may impose a suspension or termination due to a number of factors, including: a failure to conduct the clinical trial in accordance with regulatory requirements or the applicable clinical protocols; a failure to obtain the regulatory approval and/or complete record filings with respect to the collection, preservation, use, and export of mainland China’s human genetic resources; inspection of the clinical trial operations or trial site by the NMPA, FDA, or other regulatory authorities that results in the imposition of a clinical hold, unforeseen -46- safety issues, or adverse side effects; failure to demonstrate a benefit from using a product candidate; changes in government regulations or administrative actions; or lack of adequate funding to continue the clinical trial.
If we are required to conduct additional clinical trials or other testing of our products or product candidates beyond those that are currently contemplated, or if we are unable to successfully complete clinical trials of our products or product candidates or other testing, or if the results of these trials or tests are not positive or are only modestly positive or if there are safety concerns, we may: • be delayed in obtaining regulatory approval for our products and product candidates; • not obtain regulatory approval at all; • obtain approval for indications or patient populations that are not as broad as intended or desired; -45- • be subject to post-marketing testing requirements; • encounter difficulties obtaining or be unable to obtain reimbursement for use of our products and product candidates; • be subject to restrictions on the distribution and/or commercialization of our products and product candidates; or • have our products and product candidates removed from the market after obtaining regulatory approval.
If we are required to conduct additional clinical trials or other testing of our products or product candidates beyond those that are currently contemplated, or if we are unable to successfully complete clinical trials of our products or product candidates or other testing, or if the results of these trials or tests are not positive or are only modestly positive or if there are safety concerns, we may: • be delayed in obtaining regulatory approval for our products and product candidates; • not obtain regulatory approval at all; • obtain approval for indications or patient populations that are not as broad as intended or desired; • be subject to post-marketing testing requirements; • encounter difficulties obtaining or be unable to obtain reimbursement for use of our products and product candidates; • be subject to restrictions on the distribution and/or commercialization of our products and product candidates; or • have our products and product candidates removed from the market after obtaining regulatory approval.
Such reliance on third-party manufacturers entails risks to which we would not be subject to if we manufactured products or product candidates ourselves, including reliance on the third party for regulatory compliance and quality assurance, the possibility of breach of the manufacturing or supply agreement by the third party because of factors beyond our control (including a failure to synthesize and manufacture our products or product candidates in accordance with our specifications), and the possibility of termination or nonrenewal of the agreement by the third party, based on its own business priorities, at a time that is costly or damaging to us.
Such reliance on third-party manufacturers entails risks to which we would not be subject to if we manufactured products or product candidates ourselves, including reliance on the third party for regulatory compliance and quality assurance, the possibility of breach of the manufacturing or supply agreement by the third party because of factors beyond -57- our control (including a failure to synthesize and manufacture our products or product candidates in accordance with our specifications), and the possibility of termination or nonrenewal of the agreement by the third party, based on its own business priorities, at a time that is costly or damaging to us.
Our ability to successfully generate revenue from our commercial products will depend on, among other things, our ability to: • maintain sufficient manufacturing or supply arrangements with third-party licensors or manufacturers; • produce through a validated process or procure internally or from third-party manufacturers sufficient quantities and inventory of our commercial products; • build and maintain sufficient internal sales, distribution, and marketing capabilities; • increase awareness and education for our commercial products to promote acceptance from physicians, healthcare payors, patients, and the medical community; • improve access to, and affordability of, our commercial products, such as through NRDL listings or supplemental insurance coverage in the private-pay market; • maintain compliance with ongoing regulatory labeling, packaging, storage, advertising, promotion, recordkeeping, safety, and other post-marketing requirements; -38- • manage our growth and spending as costs and expenses increase due to commercialization; and • manage business interruptions resulting from the occurrence of any public health crisis, international war or conflict, natural disaster, extreme weather event, or other significant or catastrophic event outside of our control.
Our ability to successfully generate revenue from our commercial products will depend on, among other things, our ability to: -39- • maintain sufficient manufacturing or supply arrangements with third-party licensors or manufacturers; • produce through a validated process or procure internally or from third-party manufacturers sufficient quantities and inventory of our commercial products; • build and maintain sufficient internal sales, distribution, and marketing capabilities; • increase awareness and education for our commercial products to promote acceptance from physicians, healthcare payors, patients, and the medical community; • improve access to, and affordability of, our commercial products, such as through NRDL listings or supplemental insurance coverage in the private-pay market; • maintain compliance with ongoing regulatory labeling, packaging, storage, advertising, promotion, recordkeeping, safety, and other post-marketing requirements; • manage our growth and spending as costs and expenses increase due to commercialization; and • manage business interruptions resulting from the occurrence of any public health crisis, international war or conflict, natural disaster, extreme weather event, or other significant or catastrophic event outside of our control.
However, the tax resident status of an enterprise is subject to determination by Chinese -33- tax authorities, and uncertainties remain with respect to the interpretation of the term “de facto management body.” If Chinese tax authorities determine that Zai Lab Limited or any of our subsidiaries outside of mainland China is a Chinese resident enterprise for EIT purposes that entity would be subject to a 25% EIT on its global income.
However, the tax resident status of an enterprise is subject to determination by Chinese tax authorities, and uncertainties remain with respect to the interpretation of the term “de facto management body.” If Chinese tax authorities determine that Zai Lab Limited or any of our subsidiaries outside of mainland China is a Chinese resident enterprise for EIT purposes that entity would be subject to a 25% EIT on its global income.
The NMPA might -47- require us to change our planned clinical study design or otherwise spend additional resources and effort to obtain approval of our product candidates. In addition, policy changes may contain significant limitations related to use restrictions for certain age groups, warnings, precautions, or contraindications, or we may be subject to burdensome post-approval study or risk management requirements.
The NMPA might require us to change our planned clinical study design or otherwise spend additional resources and effort to obtain approval of our product candidates. In addition, policy changes may contain significant limitations related to use restrictions for certain age groups, warnings, precautions, or contraindications, or we may be subject to burdensome post-approval study or risk management requirements.
Our compliance with such existing laws, rules, and regulations, or any future related laws and regulations, could significantly increase our compliance costs, require significant changes to our operations, result in suspensions or delays of our clinical trials or -28- impair or ability to initiate new clinical trials, or even prevent us from providing certain products in jurisdictions in which we currently operate or may in the future wish to operate.
Our compliance with such existing laws, rules, and regulations, or any future related laws and regulations, could significantly increase our compliance costs, require significant changes to our operations, result in suspensions or delays of our clinical trials or impair our ability to initiate new clinical trials, or even prevent us from providing certain products in jurisdictions in which we currently operate or may in the future wish to operate.
Such statutory reserve funds and the accumulated after-tax profits that are used for covering the loss -31- cannot be distributed to us as dividends. At their discretion, our Chinese subsidiaries may allocate a portion of their after-tax profits based on Chinese accounting standards to a discretionary reserve fund. RMB is not freely convertible into other currencies.
Such statutory reserve funds and the accumulated after-tax profits that are used for covering the loss cannot be distributed to us as dividends. At their discretion, our Chinese subsidiaries may allocate a portion of their after-tax profits based on Chinese accounting standards to a discretionary reserve fund. RMB is not freely convertible into other currencies.
If our operations were found to be in violation of applicable legal and regulatory requirements, we could be subject to significant civil, criminal, and administrative penalties, including, -42- without limitation, damages, fines, imprisonment, and exclusion from participation in government healthcare programs or contracting with government authorities and the curtailment or restructuring of our operations, which could significantly harm our business.
If our operations were found to be in violation of applicable legal and regulatory requirements, we could be subject to significant civil, criminal, and administrative penalties, including, without limitation, damages, fines, imprisonment, and exclusion from participation in government healthcare programs or contracting with government authorities and the curtailment or restructuring of our operations, which could significantly harm our business.
For example, it would be unlawful to make a distribution to a holder of ADSs if it consists of securities whose offering would require registration under the Securities Act but are not so properly registered or distributed under an applicable exemption -67- from registration. The depositary may also determine that it is not reasonably practicable to distribute certain property.
For example, it would be unlawful to make a distribution to a holder of ADSs if it consists of securities whose offering would require registration under the Securities Act but are not so properly registered or distributed under an applicable exemption from registration. The depositary may also determine that it is not reasonably practicable to distribute certain property.
Although there are some protections with respect to enforcement in mainland China of judgments rendered by Hong Kong courts as a result of reciprocal recognition and enforcement of judgment arrangements, mainland China does not have treaties or agreements providing for the reciprocal recognition and enforcement of judgments awarded by courts of the United States, the United Kingdom, most other western countries, or Japan.
Although there are some protections with respect to enforcement in mainland China of judgments rendered by Hong Kong courts as a result of reciprocal recognition and enforcement of judgment arrangements, mainland China does not have treaties or agreements providing for the reciprocal recognition and enforcement of judgments awarded by courts of -36- the United States, the United Kingdom, most other western countries, or Japan.
This may discourage, delay, or prevent a change in control of the Company, which could deprive our shareholders of an opportunity to receive a premium for their shares as part of a sale of the Company and reduce the price of our securities. Such actions may be taken even if they are opposed by certain of our other shareholders.
This may discourage, delay, or prevent a change in control of the Company, which could deprive our shareholders of an opportunity to receive a premium for their shares as part of a sale of the Company and reduce the price of our securities. Such actions -71- may be taken even if they are opposed by certain of our other shareholders.
Since inception, we have incurred significant costs for our commercialization efforts with respect to our approved products, our research and development efforts related to our product candidates and related clinical or pre-clinical trials, our business development activities and related upfront or milestone fees or royalty payments in our license and collaboration arrangements, and other costs to develop the infrastructure and otherwise support our operations.
Since inception, we have incurred significant costs for our commercialization efforts with respect to our approved products, our research and development efforts related to our product candidates and related clinical or pre-clinical trials, our business development activities and related upfront or milestone fees or royalty payments in our license and -37- collaboration arrangements, and other costs to develop the infrastructure and otherwise support our operations.
Our products and product candidates may cause undesirable side effects that could delay or prevent their regulatory approval, limit the commercial profile of an approved label, or result in significant negative consequences following any regulatory approval. Undesirable side effects, including adverse safety events, caused by our products or product candidates could have a negative impact on our business.
Our products and product candidates may cause undesirable side effects that could delay or prevent their regulatory approval, limit the commercial profile of an approved label, or result in significant negative consequences following any regulatory approval. -47- Undesirable side effects, including adverse safety events, caused by our products or product candidates could have a negative impact on our business.
We may not assist investors in determining whether any of our non-U.S. subsidiaries are treated as a CFC or whether such investor is treated as a U.S. shareholder with respect to any of such CFCs. Further, we may not furnish to any investors information that may be necessary to comply with the reporting and tax -69- paying obligations discussed above.
We may not assist investors in determining whether any of our non-U.S. subsidiaries are treated as a CFC or whether such investor is treated as a U.S. shareholder with respect to any of such CFCs. Further, we may not furnish to any investors information that may be necessary to comply with the reporting and tax paying obligations discussed above.
The incurrence of additional indebtedness or the -37- issuance of certain equity securities could result in increased fixed payment obligations and additional restrictive covenants, such as limitations on our ability to incur additional debt or issue additional equity, limitations on our ability to acquire or license intellectual property rights, and other operating restrictions that could adversely impact our ability to conduct our business.
The incurrence of additional indebtedness or the issuance of certain equity securities could result in increased fixed payment obligations and additional restrictive covenants, such as limitations on our ability to incur additional debt or issue additional equity, limitations on our ability to acquire or license intellectual property rights, and other operating restrictions that could adversely impact our ability to conduct our business.
Consequently, we do not know whether any of our technology, products or product candidates will be protectable or remain protected by valid and -59- enforceable patents. Our competitors or other third parties may be able to circumvent our owned or in-licensed patents by developing similar or alternative technologies or products in a non-infringing manner.
Consequently, we do not know whether any of our technology, products or product candidates will be protectable or remain protected by valid and enforceable patents. Our competitors or other third parties may be able to circumvent our owned or in-licensed patents by developing similar or alternative technologies or products in a non-infringing manner.
With the development of the foreign exchange market and progress towards interest rate liberalization and RMB internationalization, the Chinese government has announced, and may again in the future announce, changes to the exchange rate system. There is no guarantee that the RMB will not appreciate or depreciate significantly in value against the U.S. dollar.
With the development of the foreign exchange market -67- and progress towards interest rate liberalization and RMB internationalization, the Chinese government has announced, and may again in the future announce, changes to the exchange rate system. There is no guarantee that the RMB will not appreciate or depreciate significantly in value against the U.S. dollar.
The product-related side effects could affect patient recruitment or the ability of enrolled patients to complete the trial or result in potential product liability claims. Any of these occurrences may harm our business, financial condition, and prospects significantly. -46- Additionally, our products and product candidates could cause undesirable side effects related to off-target toxicity.
The product-related side effects could affect patient recruitment or the ability of enrolled patients to complete the trial or result in potential product liability claims. Any of these occurrences may harm our business, financial condition, and prospects significantly. Additionally, our products and product candidates could cause undesirable side effects related to off-target toxicity.
If we are not able to maintain regulatory compliance, regulatory approval that has been obtained may be lost, and we may not achieve or sustain profitability, which may harm our business, financial condition, and prospects significantly. -48- Our future success depends on our ability to retain key executives and to attract, retain, and motivate qualified personnel.
If we are not able to maintain regulatory compliance, regulatory approval that has been obtained may be lost, and we may not achieve or sustain profitability, which may harm our business, financial condition, and prospects significantly. Our future success depends on our ability to retain key executives and to attract, retain, and motivate qualified personnel.
We are not permitted to market any of our products or product candidates in mainland China, the United States, the EU, or any other jurisdictions until we have received required regulatory approvals. The process to develop, obtain regulatory approval, and commercialize product candidates is long, complex, and costly and varies among countries.
We are not permitted to market any of our products or product candidates in mainland China, the United States, the EU, or any other jurisdictions until we have received required regulatory approvals. The process to develop, obtain -40- regulatory approval, and commercialize product candidates is long, complex, and costly and varies among countries.
Consequently, any predictions about our future success, performance, or prospects are subject to significant uncertainty, particularly in light of the dynamic and evolving industry in which we operate. We will encounter risks and difficulties frequently experienced by companies in our industry as we continue to expand or enhance our commercial activities.
Consequently, any predictions about our future success, performance, or prospects are subject to significant uncertainty, particularly in -42- light of the dynamic and evolving industry in which we operate. We will encounter risks and difficulties frequently experienced by companies in our industry as we continue to expand or enhance our commercial activities.
Our success depends significantly on our ability to develop, manufacture, market, and sell our commercial products and use our proprietary technologies without infringing, misappropriating, or otherwise violating the patents and other -61- proprietary rights of third parties. The biotechnology and pharmaceutical industries are characterized by extensive litigation regarding patents and other intellectual property rights.
Our success depends significantly on our ability to develop, manufacture, market, and sell our commercial products and use our proprietary technologies without infringing, misappropriating, or otherwise violating the patents and other proprietary rights of third parties. The biotechnology and pharmaceutical industries are characterized by extensive litigation regarding patents and other intellectual property rights.
A number of companies in the pharmaceutical and biotechnology industries have suffered significant setbacks in advanced clinical trials due to lack of efficacy or adverse safety profiles, notwithstanding promising results in earlier trials. There are inherent uncertainties associated with the development of our products and product candidates.
A number of companies in the pharmaceutical and biotechnology industries have suffered significant -45- setbacks in advanced clinical trials due to lack of efficacy or adverse safety profiles, notwithstanding promising results in earlier trials. There are inherent uncertainties associated with the development of our products and product candidates.
Cybersecurity risks for companies like ours have significantly increased in recent years, in part because of the proliferation of new technologies, the use of the internet and certain technologies to conduct business, and the increased -53- sophistication and activities of organized crime, hackers, terrorists, and other external parties, including foreign state-sponsored actors.
Cybersecurity risks for companies like ours have significantly increased in recent years, in part because of the proliferation of new technologies, the use of the internet and certain technologies to conduct business, and the increased sophistication and activities of organized crime, hackers, terrorists, and other external parties, including foreign state-sponsored actors.
In the future, we may grow our business by acquiring complementary businesses. Complying with the necessary notification and review requirements to complete such transactions may be time consuming, and our ability to obtain any necessary approvals, such as from the MOFCOM or its local counterparts, may delay or -32- prevent our ability to complete such transactions.
In the future, we may grow our business by acquiring complementary businesses. Complying with the necessary notification and review requirements to complete such transactions may be time consuming, and our ability to obtain any necessary approvals, such as from the MOFCOM or its local counterparts, may delay or prevent our ability to complete such transactions.
As a result, we may forego or delay pursuit of opportunities for other products or product candidates or for other indications that later prove to have greater commercial potential, and our resource allocation -41- decisions may cause us to fail to capitalize on promising commercial drugs or profitable market opportunities.
As a result, we may forego or delay pursuit of opportunities for other products or product candidates or for other indications that later prove to have greater commercial potential, and our resource allocation decisions may cause us to fail to capitalize on promising commercial drugs or profitable market opportunities.
For example, in the United States, a single patent (provided it claims the approved drug or method for using it, or a method for manufacturing the drug) may be eligible for patent term extension of up to five years, although it cannot extend the remaining term of a patent beyond a total of 14 years from the date of -63- product approval.
For example, in the United States, a single patent (provided it claims the approved drug or method for using it, or a method for manufacturing the drug) may be eligible for patent term extension of up to five years, although it cannot extend the remaining term of a patent beyond a total of 14 years from the date of product approval.
Our debt could also limit our flexibility to plan for and react to changes in our business or industry and may increase our vulnerability to general adverse economic and industry conditions, including a downturn in our business or the economy. This debt is denominated in RMB, and some bears interest at variable rates.
Our debt could also limit our flexibility to plan for and react to changes in our business or industry and may increase our vulnerability to general adverse economic and industry conditions, including a downturn in our business or the economy. -38- This debt is denominated in RMB, and some bears interest at variable rates.
Mergers and acquisitions in the pharmaceutical, biotechnology, and diagnostic industries may result in resources being further concentrated among a smaller number of our competitors. Smaller or early-stage companies may also prove to be significant competitors, particularly through -43- collaborative arrangements with large and established companies.
Mergers and acquisitions in the pharmaceutical, biotechnology, and diagnostic industries may result in resources being further concentrated among a smaller number of our competitors. Smaller or early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies.
In addition, once a product is approved by the applicable regulatory authority for marketing, it is possible that there could be a subsequent discovery of previously unknown problems with the product, including problems with third-party manufacturers or manufacturing processes, or failure to comply with regulatory requirements.
In addition, once a product is approved by the applicable regulatory authority for marketing, it is possible that there could be a subsequent discovery of previously unknown problems with the product, including problems with third-party -49- manufacturers or manufacturing processes, or failure to comply with regulatory requirements.
In connection with such partnership or collaboration opportunities, acquisitions, or investments, we may: • issue securities that would dilute the percentage of ownership of the holders of our securities; • incur debt and assume liabilities; and • incur amortization expenses related to intangible assets or incur large and immediate write-offs.
In connection with such partnership or collaboration opportunities, acquisitions, or investments, we may: • issue securities that would dilute the percentage of ownership of the holders of our securities; • incur debt and assume liabilities; and -51- • incur amortization expenses related to intangible assets or incur large and immediate write-offs.
For example, inspections by the PCAOB of auditors located in mainland China and -27- Hong Kong have at times identified deficiencies in those auditors’ audit procedures and quality control procedures, and limitations on the ability of the PCAOB to inspect or investigate auditors in mainland China or Hong Kong could deprive investors of the benefits of PCAOB inspections.
For example, inspections by the PCAOB of auditors located in mainland China and Hong Kong have at times identified deficiencies in those auditors’ audit procedures and quality control procedures, and limitations on the ability of the PCAOB to inspect or investigate auditors in mainland China or Hong Kong could deprive investors of the benefits of PCAOB inspections.
Chinese regulations establish complex procedures for certain acquisitions of mainland China based companies by foreign investors, which could make it more difficult for us to pursue growth through acquisitions in mainland China. Chinese regulations establish certain additional procedures and requirements that could make merger and acquisition activities by foreign investors more time consuming and complex.
Chinese regulations establish complex procedures for certain acquisitions of mainland China based companies by foreign investors, which could make it more difficult for us to pursue growth through acquisitions in mainland China. -33- Chinese regulations establish certain additional procedures and requirements that could make merger and acquisition activities by foreign investors more time consuming and complex.
We currently manufacture, or have rights to manufacture, our internally developed products and certain of our licensed commercial products and product candidates under the terms of our licensing arrangements. We rely on our two manufacturing facilities in Suzhou to support the clinical development and commercial production of such products and product candidates, including ZEJULA.
We currently manufacture, or have rights to manufacture, our internally developed products and certain of our licensed commercial products and product candidates under the terms of our licensing arrangements. We rely on our two manufacturing facilities in Suzhou to support the clinical development and commercial production of such products and product candidates, including ZEJULA and NUZYRA.
Taxing authorities could reallocate our taxable income among our subsidiaries, which could increase our overall tax liability. We are organized under the laws of the Cayman Islands and currently have subsidiaries in mainland China, Hong Kong, Taiwan, the Cayman Islands, the United States, Australia, and the British Virgin Islands.
Taxing authorities could reallocate our taxable income among our subsidiaries, which could increase our overall tax liability. -69- We are organized under the laws of the Cayman Islands and currently have subsidiaries in mainland China, Hong Kong, Taiwan, the Cayman Islands, the United States, Australia, and the British Virgin Islands.
If we are not able to transfer data outside of mainland China to comply with our contractual requirements or requirements of judicial or law enforcement authorities outside of mainland China, as a result of our requirements in China, it could materially and adversely affect our business and operating results.
If we are not able to transfer data outside of mainland China to comply with our contractual requirements or requirements of judicial or law enforcement authorities outside of -29- mainland China, as a result of our requirements in China, it could materially and adversely affect our business and operating results.
Such investigations, allegations, and the reporting thereof, and any potential enforcement actions, formal convictions, or administrative penalties or fines in connection therewith, may materially adversely affect our business and reputation. In addition, such investigations may lead to additional allegations or findings or may implicate or expand to additional employees.
Such -31- investigations, allegations, and the reporting thereof, and any potential enforcement actions, formal convictions, or administrative penalties or fines in connection therewith, may materially adversely affect our business and reputation. In addition, such investigations may lead to additional allegations or findings or may implicate or expand to additional employees.
Further, we cannot predict whether patent applications that we hold rights to or any of our other owned or in-licensed pending patent applications will result in the issuance of patents that effectively protect our products, product candidates, and technologies, or whether our issued patents will effectively exclude competitors.
Further, we cannot predict whether patent applications that we hold rights to or any of our other owned or in-licensed pending patent applications will result in the issuance of patents -60- that effectively protect our products, product candidates, and technologies, or whether our issued patents will effectively exclude competitors.
Under recent guidelines, however, we are required to submit filings to the CSRC following the submission of future overseas listings and -29- the completion of future offerings of our equity securities to foreign investors, including for future securities offerings in the same overseas markets as our previous issuances.
Under recent guidelines, however, we are required to submit filings to the CSRC following the submission of future overseas listings and the completion of future offerings of our equity securities to foreign investors, including for future securities offerings in the same overseas markets as our previous issuances.
Our ability to obtain and maintain these regulatory approvals is uncertain, and future government regulation may place additional burdens on our efforts to commercialize our products and product candidates. -51- The life sciences industry in mainland China is subject to extensive government regulation and supervision.
Our ability to obtain and maintain these regulatory approvals is uncertain, and future government regulation may place additional burdens on our efforts to commercialize our products and product candidates. The life sciences industry in mainland China is subject to extensive government regulation and supervision.
The assignment of intellectual property rights may not be self-executing, or the assignment agreements may be breached, and we may be forced to bring claims against our employees, contractors, or other third parties, or defend claims that they may bring against us, to determine the ownership of certain intellectual property.
The assignment of intellectual property rights may not be self-executing, or the assignment -64- agreements may be breached, and we may be forced to bring claims against our employees, contractors, or other third parties, or defend claims that they may bring against us, to determine the ownership of certain intellectual property.
Conversely, if we decide to convert our RMB or HK dollars into U.S. dollars for the purpose of making payments for business purposes, appreciation of the U.S. dollar against the RMB would have a negative effect on the U.S. dollar amount -66- available to us.
Conversely, if we decide to convert our RMB or HK dollars into U.S. dollars for the purpose of making payments for business purposes, appreciation of the U.S. dollar against the RMB would have a negative effect on the U.S. dollar amount available to us.
We have established a branch register of members in Hong Kong (the “Hong Kong share register”) for our ordinary shares that are traded on the Hong Kong Stock Exchange, and the trading of these ordinary shares on the Hong Kong Stock -71- Exchange will be subject to the Hong Kong stamp duty.
We have established a branch register of members in Hong Kong (the “Hong Kong share register”) for our ordinary shares that are traded on the Hong Kong Stock Exchange, and the trading of these ordinary shares on the Hong Kong Stock Exchange will be subject to the Hong Kong stamp duty.
Zai Lab Trading (Suzhou) Co., Ltd., an operating subsidiary of ours that is domiciled in mainland China, received RMB1.0 million in capital contributions via contributions from Zai Lab (Suzhou) Co., Ltd., its sole shareholder, in 2020 to fund its business operations in mainland China.
Zai Lab Trading (Suzhou) Co., Ltd., an operating subsidiary of ours that is domiciled in mainland China, received RMB1.0 million in capital contributions via contribution from Zai Lab (Suzhou) Co., Ltd., its sole shareholder, in 2020 to fund its business operations in mainland China.
This could disrupt our operations and result in significant relocation expenses, which could adversely affect our business, financial condition, and results of operations. In addition, we compete with other -35- businesses for premises at certain locations or of desirable sizes.
This could disrupt our operations and result in significant relocation expenses, which could adversely affect our business, financial condition, and results of operations. In addition, we compete with other businesses for premises at certain locations or of desirable sizes.
In addition to the payment of fees, during the patent application process, the patent office of any given jurisdiction requires compliance with procedural and documentary provisions. In some of our licensed matters, we rely on our licensors to comply with these requirements.
In addition to the payment of fees, during the patent application process, -65- the patent office of any given jurisdiction requires compliance with procedural and documentary provisions. In some of our licensed matters, we rely on our licensors to comply with these requirements.
Changes in patent laws and regulations in various jurisdictions, changes in the governmental bodies that enforce them, or changes in how the relevant governmental authority enforces them may weaken our ability to obtain new patents or patent rights through our licensors or to enforce any patents in the future.
Changes in patent laws and regulations in various jurisdictions, changes in the governmental bodies that enforce them, or changes in how the relevant -62- governmental authority enforces them may weaken our ability to obtain new patents or patent rights through our licensors or to enforce any patents in the future.
As a holder or beneficial owner of ADSs, you may have limited recourse if we or the depositary fail to meet our respective obligations under the deposit agreement or if you wish us or the depositary to participate in legal proceedings.
As a holder or beneficial owner of ADSs, you may have limited recourse if we or the depositary fail to meet our respective obligations under the -68- deposit agreement or if you wish us or the depositary to participate in legal proceedings.
Furthermore, under Chinese securities laws, no overseas securities regulator is allowed to directly conduct investigation or evidence collection activities in mainland China, which may further increase difficulties shareholders may face in protecting their interests.
Furthermore, under Chinese securities laws, no overseas securities regulator is allowed to directly conduct investigation or -34- evidence collection activities in mainland China, which may further increase difficulties shareholders may face in protecting their interests.
If we do enter into partnerships or strategic collaborations or make other investments, such arrangements may not ultimately strengthen our competitive position or -50- may be viewed negatively by customers, financial markets, or investors.
If we do enter into partnerships or strategic collaborations or make other investments, such arrangements may not ultimately strengthen our competitive position or may be viewed negatively by customers, financial markets, or investors.
In addition, our major customers may seek to negotiate more favorable terms for them in the future. Under such circumstances, we may have to agree to less favorable terms in order to maintain the ongoing cooperative relationships with our major customers.
In addition, our major customers may seek to negotiate more favorable terms for them in the future. Under such circumstances, we may have to -59- agree to less favorable terms in order to maintain the ongoing cooperative relationships with our major customers.
This could result in significant losses or reputational damage, adversely affect our relationships -54- with our partners, customers, vendors, and other third parties, negatively affect our competitive position, or otherwise harm our business.
This could result in significant losses or reputational damage, adversely affect our relationships with our partners, customers, vendors, and other third parties, negatively affect our competitive position, or otherwise harm our business.
Regardless of merit or eventual outcome, the consequences to us from those claims (whether resulting from our sales in our licensed territories, or those of our licensors’ sales elsewhere in the world) may result in: • significant negative media attention and reputational damage; • withdrawal of clinical trial subjects and inability to continue clinical trials; • significant costs to defend related litigation; • substantial monetary awards to trial subjects or patients; • the inability to commercialize any products or product candidates that we may develop; • initiation of investigations by regulators; • a diversion of management’s time and our resources; and • a decline in the market price of our securities.
Regardless of merit or eventual outcome, the consequences to us from those claims (whether resulting from our sales in our licensed territories, or those of our licensors’ sales elsewhere in the world) may result in: • significant negative media attention and reputational damage; • withdrawal of clinical trial subjects and inability to continue clinical trials; • significant costs to defend related litigation; • substantial monetary awards to trial subjects or patients; • the inability to commercialize any products or product candidates that we may develop; • initiation of investigations by regulators; • a diversion of management’s time and our resources; and • a decline in the market price of our securities. -54- Any litigation or investigation might result in substantial costs and diversion of resources.
Zai Biopharmaceutical (Suzhou) Co., Ltd., an operating subsidiary of ours that is domiciled in mainland China, received $15.0 million in capital contributions via four separate contributions from Zai Lab (Hong Kong) Limited, its sole shareholder, domiciled outside of mainland China, from 2017 to 2018 to fund its business operations in mainland China.
Zai Biopharmaceutical (Suzhou) Co., Ltd., an operating subsidiary of ours that is domiciled in mainland China, received $15.0 million in capital contributions via 4 separate contributions from Zai Lab (Hong Kong) Limited, its sole shareholder, domiciled outside of mainland China, from 2017 to 2018 to fund its business operations in mainland China.
Zai Lab (Shanghai) Co., Ltd., an operating subsidiary of ours that is domiciled in mainland China, received $466.5 million in capital contributions via 24 separate contributions from Zai Lab (Hong Kong) Limited, its sole shareholder, domiciled outside of mainland China, from 2014 to 2024, to fund its business operations in mainland China.
Zai Lab (Shanghai) Co., Ltd., an operating subsidiary of ours that is domiciled in mainland China, received $466.5 million in capital contributions via 24 separate contributions from Zai Lab (Hong Kong) Limited, its sole shareholder, domiciled outside of mainland China, from 2014 to 2025, to fund its business operations in mainland China.
Although we believe our cash and cash equivalents and short-term investments as of December 31, 2024 will enable us to fund our operating expenses and capital expenditure requirements for at least the next twelve months, we could use our capital resources sooner than we currently expect.
Although we believe our cash and cash equivalents and short-term investments as of December 31, 2025 will enable us to fund our operating expenses and capital expenditure requirements for at least the next twelve months, we could use our capital resources sooner than we currently expect.
In mainland China, the NHSA is responsible for administering mainland China’s social security system, including price negotiations with drug companies seeking to include their products in the NRDL. Such price negotiations have resulted in average price reductions ranging from around 53% to 63% over the past few years.
In mainland China, the NHSA is responsible for administering mainland China’s social security system, including price negotiations with drug companies seeking to include their products in the NRDL. Such price negotiations have resulted in average price reductions ranging from around 50% to 63% over the past few years.
The Chinese government may intervene in or influence our business, which could result in a material change in our operations, strategy, research and development activities, commercial activities, business, financial condition, results of operations, and prospects.
The Chinese government may intervene in or influence our business, which could result in a material change in our operations, strategy, research and development activities, commercial activities, business, financial condition, results of operations, prospects, and the value of our securities.
Additionally, some of our competitors may successfully adopt or use emerging technologies, including artificial intelligence, to enhance their clinical or business operations before we are able to do so, which could leave us at a competitive disadvantage or with higher costs relative to our peers.
Additionally, some of our competitors may successfully adopt or use emerging technologies to enhance their clinical or business operations before we are able to do so, which could leave us at a competitive disadvantage or with higher costs relative to our peers.
The Chinese government has significant oversight and discretion over the conduct of our business and may intervene or influence our operations as the government deems appropriate to further regulatory, political, and societal goals.
The Chinese government has significant oversight and discretion over the conduct of our business and may intervene or influence our operations at any time as the government deems appropriate to further regulatory, political, and societal goals.
Congress and regulatory authorities have expressed concerns about challenges in their oversight of financial statement audits of U.S.-listed companies with significant operations in mainland China and with auditors located in mainland China.
In recent years, the U.S. Congress and regulatory authorities have expressed concerns about challenges in their oversight of financial statement audits of U.S.-listed companies with significant operations in mainland China and with auditors located in mainland China.
The timing, amount, and criteria of government financial incentives are determined within the sole discretion of the local government authorities and cannot be predicted with certainty. We received government grants and subsidies of $8.2 million and $2.4 million in 2024 and 2023, respectively. Local governments may decide to reduce or eliminate incentives that we are receiving at any time.
The timing, amount, and criteria of government financial incentives are determined within the sole discretion of the local government authorities and cannot be predicted with certainty. We received government grants and subsidies of $5.9 million and $8.2 million in 2025 and 2024, respectively. Local governments may decide to reduce or eliminate incentives that we are receiving at any time.
The Chinese government has published policies that significantly affect certain industries, such as the education and internet industries, and it may in the future release regulations or policies regarding the life sciences industry that could require us to seek permission from Chinese authorities to continue to operate our business or that may affect our strategy, research and development activities, or commercial activities, which may adversely affect our business, financial condition, results of operations, and prospects.
The Chinese government has published policies that significantly affect certain industries, such as the education and internet industries, and it may in the future release regulations or policies regarding the life sciences industry that could require us to seek permission from Chinese authorities to continue to operate our business or that may affect our strategy, research and development activities, or commercial activities, which may adversely affect our business, financial condition, results of operations, prospects, and the value of our securities, including potentially making those securities worthless.
Recently, Chinese regulators have announced regulatory actions aimed at providing the Chinese government with greater oversight over certain sectors of mainland China’s economy, including the for-profit education and technology sectors.
Chinese regulators have from time to time announced regulatory actions aimed at providing the Chinese government with greater oversight over certain sectors of mainland China’s economy, including the for-profit education and technology sectors.
For example, granted claims in two Chinese patents that pertain to certain aspects related to OPTUNE have been the subject of a successful invalidation proceeding, which is currently being appealed. Such proceedings also may result in substantial costs and require significant time from our scientists and management, even if the eventual outcome is favorable to us.
For example, granted claims of a patent issued by the PRC that pertain to certain aspects related to OPTUNE have been the subject of a successful invalidation proceeding, which is currently being appealed. Such proceedings also may result in substantial costs and require significant time from our scientists and management, even if the eventual outcome is favorable to us.
Although our annual product revenues have been increasing for the last few years and we continue to focus on efficiency and productivity, we continue to incur significant development, commercialization, and other expenses related to our ongoing operations. As a result, we have incurred net losses since our inception, including $257.1 million for 2024.
Although our annual product revenues have been increasing for the last few years and we continue to focus on efficiency and productivity, we continue to incur significant development, commercialization, and other expenses related to our ongoing operations. As a result, we have incurred net losses since our inception, including $175.5 million for 2025.
General Risk Factors We are subject to the risks of doing business globally, such as from economic or political tensions between the United States and China and other business disruptions or other adverse effects caused by economic downturns, market conditions, changing legal and regulatory requirements, political instability, trade sanctions, public health crises, international war or conflict, natural disasters, extreme weather events, and other geopolitical events or significant disruptions outside of our control.
General Risk Factors We are subject to the risks of doing business globally, such as from economic or political tensions between the United States and China and other business disruptions or other adverse effects caused by economic downturns, market conditions, changing legal and regulatory requirements, political instability, trade sanctions, public health crises, international war or conflict, natural disasters, extreme weather events, and other geopolitical events or significant disruptions outside of our control. -73- Because we operate in Greater China, the United States, and other countries, our business is subject to risks associated with doing business globally.
We may need to significantly reduce our prices for our approved products in mainland China and face uncertainty of reimbursement, which could diminish our sales or adversely affect our profitability. The regulations that govern pricing and reimbursement for pharmaceutical drugs and devices vary widely from country to country.
We may need to significantly reduce our prices for our approved products in mainland China to be included in the NRDL for reimbursement, which could diminish our sales or adversely affect our profitability. The regulations that govern pricing and reimbursement for pharmaceutical drugs and devices vary widely from country to country.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeAccordingly, we have established cybersecurity standards, policies, and operating procedures, including our Global IT Policy and Information Security Policy and our incident response plan, for the purpose of implementing information protection processes and technologies; carrying out cybersecurity risk detection, identification, assessment, response, and monitoring; assigning responsibility within our organization for risk detection and oversight; implementing cybersecurity training; governing internal communications regarding cybersecurity risks; and making required public and regulatory disclosures regarding cybersecurity threats and incidents.
Biggest changeAccordingly, cybersecurity is an important and integrated part of the Company’s enterprise risk management function that identifies, monitors, and mitigates business, operational, and legal risks. -75- Accordingly, we have established cybersecurity standards, policies, and operating procedures, including our Global IT Policy and Information Security Policy and our incident response plan, for the purpose of implementing information protection processes and technologies; carrying out cybersecurity risk detection, identification, assessment, response, and monitoring; assigning responsibility within our organization for risk detection and oversight; implementing cybersecurity training; governing internal communications regarding cybersecurity risks; and making required public and regulatory disclosures regarding cybersecurity threats and incidents.
Periodically, the Audit Committee reviews and discusses with management, our internal auditor, and, in its discretion, third party vendors or other external experts, the adequacy of -74- security for our information technology systems, processes, and data; our incident response and contingency plans in the event of a breakdown or security breach affecting the security of our information technology systems or data or the information technology systems, processes, and data of our clients; and any new threats or incidents that have or may impact us.
Periodically, the Audit Committee reviews and discusses with management, our internal auditor, and, in its discretion, third party vendors or other external experts, the adequacy of security for our information technology systems, processes, and data; our incident response and contingency plans in the event of a breakdown or security breach affecting the security of our information technology systems or data or the information technology systems, processes, and data of our clients; and any new threats or incidents that have or may impact us.
Protecting the confidentiality, integrity, and availability of our business information, intellectual property, customer, patient and employee data, and technology systems is critical to our business and operations, ability to comply with regulatory requirements, and reputation. Accordingly, cybersecurity is an important and integrated part of the Company’s enterprise risk management function that identifies, monitors, and mitigates business, operational, and legal risks.
Protecting the confidentiality, integrity, and availability of our business information, intellectual property, customer, patient and employee data, and technology systems is critical to our business and operations, ability to comply with regulatory requirements, and reputation.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. Properties We lease our principal executive offices in Shanghai and Cambridge, Massachusetts as well as various administrative offices in Shanghai, Beijing, Guangzhou, Hong Kong, Taiwan, and South San Francisco, California and research and development facilities in Shanghai and a small site in San Diego, California.
Biggest changeItem 2. Properties We lease our principal executive offices in Shanghai and Cambridge, Massachusetts as well as various administrative offices in Shanghai, Beijing, Guangzhou, Hong Kong, Taiwan, and South San Francisco, California and -76- research and development facilities in Shanghai and a small site in San Diego, California.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeHowever, we do not consider any such claims, lawsuits, or proceedings that are currently pending, individually or in the aggregate, to be material to our business or likely to result in a material adverse effect on our future operating results, financial condition, or cash flows. Item 4. Mine Safety Disclosures Not applicable. -75- PART II
Biggest changeHowever, we do not consider any such claims, lawsuits, or proceedings that are currently pending, individually or in the aggregate, to be material to our business or likely to result in a material adverse effect on our future operating results, financial condition, or cash flows. Item 4. Mine Safety Disclosures Not applicable. -77- PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe cumulative total shareholder returns over the indicated period are based on historical data and should not be considered indicative of future shareholder returns. -76- The shareholder return shown on the graph below is not necessarily indicative of future performance, and we do not make or endorse any predictions as to future shareholder returns. 12/31/19 12/31/20 12/31/21 12/31/22 12/31/23 12/31/24 Zai Lab Limited 100.00 325.41 151.12 73.82 65.71 62.97 Nasdaq Composite Index 100.00 143.64 174.36 116.65 167.30 215.22 Nasdaq Biotechnology Index 100.00 125.69 124.89 111.27 115.42 113.84 Recent Sales of Unregistered Securities None.
Biggest changeThe cumulative total shareholder returns over the indicated period are based on historical data and should not be considered indicative of future shareholder returns. -78- The shareholder return shown on the graph below is not necessarily indicative of future performance, and we do not make or endorse any predictions as to future shareholder returns. 12/31/20 12/31/21 12/31/22 12/31/23 12/31/24 12/31/25 Zai Lab Limited 100.00 46.44 22.68 20.19 19.35 13.03 Nasdaq Composite Index 100.00 121.39 81.21 116.47 149.83 180.33 Nasdaq Biotechnology Index 100.00 99.37 88.53 91.84 90.58 119.92 Recent Sales of Unregistered Securities None.
The following graph compares the yearly percentage change in the cumulative total shareholder return of our ADSs with the cumulative total return of the NASDAQ Composite Index (U.S.) and the NASDAQ Biotechnology Index for the past five years. The graph assumes an investment of $100 at market close on December 30, 2019 and reinvestment of any dividends.
The following graph compares the yearly percentage change in the cumulative total shareholder return of our ADSs with the cumulative total return of the NASDAQ Composite Index (U.S.) and the NASDAQ Biotechnology Index for the past five years. The graph assumes an investment of $100 at market close on December 30, 2020 and reinvestment of any dividends.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Our ADSs are traded on Nasdaq under the symbol “ZLAB.” Our ordinary shares are publicly traded on the Hong Kong Stock Exchange under the stock code “9688.” Shareholders As of February 21, 2025, we had approximately 11 holders of record of our ordinary shares.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Our ADSs are traded on Nasdaq under the symbol “ZLAB.” Our ordinary shares are publicly traded on the Hong Kong Stock Exchange under the stock code “9688.” Shareholders As of February 20, 2026, we had approximately 11 holders of record of our ordinary shares.
Issuer Purchases of Equity Securities There were no repurchases of our equity securities during the fourth quarter of 2024. Item 6. [Reserved] Not applicable. -77-
Issuer Purchases of Equity Securities None. Item 6. [Reserved] Not applicable. -79-

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeResults of Operations The following table presents our results of operations ($ in thousands): Year Ended December 31 Change 2024 2023 $ % Revenues Product revenue, net 397,614 266,719 130,895 49 % Collaboration revenue 1,374 — 1,374 NM Total revenues 398,988 266,719 132,269 50 % Expenses Cost of product revenue (147,118) (95,816) (51,302) 54 % Cost of collaboration revenue (742) — (742) NM Research and development (234,504) (265,868) 31,364 (12) % Selling, general and administrative (298,741) (281,608) (17,133) 6 % Gain on sale of intellectual property — 10,000 (10,000) (100) % Loss from operations (282,117) (366,573) 84,456 (23) % Interest income 37,105 39,797 (2,692) (7) % Interest expenses (2,254) — (2,254) NM Foreign currency losses (15,137) (14,850) (287) 2 % Other income, net 5,300 7,006 (1,706) (24) % Loss before income tax (257,103) (334,620) 77,517 (23) % Income tax expense — — — — % Net loss (257,103) (334,620) 77,517 (23) % NM - Not Meaningful Revenues Product Revenue, Net The following table presents net revenue by commercial program ($ in thousands): Year Ended December 31 Change 2024 2023 $ % ZEJULA 187,082 168,843 18,239 11 % VYVGART / VYVGART Hytrulo 93,639 10,011 83,628 835 % NUZYRA 43,199 21,656 21,543 99 % OPTUNE 40,475 46,969 (6,494) (14) % QINLOCK 28,826 19,240 9,586 50 % XACDURO 3,305 — 3,305 NM AUGTYRO 1,088 — 1,088 NM Total 397,614 266,719 130,895 49 % NM - Not Meaningful -81- Our product revenue is derived from the sales of our commercial products, primarily in mainland China, net of sales returns and rebates to distributors with respect to the sales of these products.
Biggest changeResults of Operations The following table presents our results of operations ($ in thousands): Year Ended December 31 Change 2025 2024 $ % Revenues Product revenue, net 457,182 397,614 59,568 15 % Collaboration revenue 2,974 1,374 1,600 116 % Total revenues 460,156 398,988 61,168 15 % Expenses Cost of product revenue (190,520) (147,118) (43,402) 30 % Cost of collaboration revenue (561) (742) 181 (24) % Research and development (220,904) (234,504) 13,600 (6) % Selling, general, and administrative (277,605) (298,741) 21,136 (7) % Loss from operations (229,434) (282,117) 52,683 (19) % Interest income 33,048 37,105 (4,057) (11) % Interest expenses (5,209) (2,254) (2,955) 131 % Foreign currency gains (losses) 19,591 (15,137) 34,728 (229) % Other income, net 3,540 5,300 (1,760) (33) % Loss before income tax (178,464) (257,103) 78,639 (31) % Income tax benefit 2,927 — 2,927 NM Net loss (175,537) (257,103) 81,566 (32) % NM - Not Meaningful Revenues Product Revenue, Net The following table presents net revenue by commercial program ($ in thousands): Year Ended December 31 Change 2025 2024 $ % ZEJULA 189,042 187,082 1,960 1 % VYVGART / VYVGART Hytrulo 94,198 93,639 559 1 % NUZYRA 60,836 43,199 17,637 41 % OPTUNE 48,325 40,475 7,850 19 % QINLOCK 35,614 28,826 6,788 24 % XACDURO 22,912 3,305 19,607 593 % AUGTYRO 5,538 1,088 4,450 409 % Other (i) 717 — 717 NM Total product revenue, net 457,182 397,614 59,568 15 % NM - Not Meaningful -83- (i) Other includes product candidates sold in patient programs prior to commercialization.
Other selling, general, and administrative expenses include product distribution and promotion costs, and professional service fees for legal, intellectual property, consulting, auditing, and tax services as well as other direct and allocated expenses for rent and maintenance of facilities, insurance, and other supplies used in selling, general, and administrative activities.
Other selling, general, and administrative expenses include product distribution and promotion costs, and professional service fees for legal, intellectual property, auditing, and tax services as well as other direct and allocated expenses for rent and maintenance of facilities, insurance, and other supplies used in selling, general, and administrative activities.
Liquidity and Capital Resources To date, we have financed our activities primarily through private placements, our September 2017 initial public offering and various follow-on offerings on Nasdaq, and our September 2020 secondary listing and initial public offering on the Hong Kong Stock Exchange.
Liquidity and Capital Resources To date, we have financed our activities primarily through private placements and public offerings, including our September 2017 initial public offering and various follow-on offerings on Nasdaq, and our September 2020 secondary listing and initial public offering on the Hong Kong Stock Exchange.
If actual results vary from our estimates or our expectations change, our reported expenses and earnings for the corresponding period may be affected. -84- Income Taxes We recognize deferred tax assets and liabilities for temporary differences between the financial statement and income tax bases of assets and liabilities, which are measured using enacted tax rates and laws that will be in effect when the differences are expected to reverse.
If actual results vary from our estimates or our expectations change, our reported expenses and earnings for the corresponding period may be affected. -86- Income Taxes We recognize deferred tax assets and liabilities for temporary differences between the financial statement and income tax bases of assets and liabilities, which are measured using enacted tax rates and laws that will be in effect when the differences are expected to reverse.
We expect our product revenue to increase in coming years as we continue to focus on increasing patient access to our existing commercial products, such as through NRDL listing or increased supplemental -79- insurance coverage in the private-pay market, and as we launch additional commercial products, if and when we obtain required regulatory approvals.
We expect our product revenue to increase in coming years as we continue to focus on increasing patient access to our existing commercial products, such as through NRDL listing or increased supplemental -81- insurance coverage in the private-pay market, and as we launch additional commercial products, if and when we obtain required regulatory approvals.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations You should read the following discussion and analysis of our financial condition and results of operations together with our consolidated financial statements and the accompanying notes in this report. This section generally discusses year-over-year comparisons between 2024 and 2023.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations You should read the following discussion and analysis of our financial condition and results of operations together with our consolidated financial statements and the accompanying notes in this report. This section generally discusses year-over-year comparisons between 2025 and 2024.
For a discussion of year-over-year changes in our financial condition and results of operations between 2023 and 2022, see Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed on February 27, 2024.
For a discussion of year-over-year changes in our financial condition and results of operations between 2024 and 2023, see Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, filed on February 27, 2025.
A valuation allowance is provided when it is more likely than not that some or all of a deferred tax asset will not be realized. Significant judgements are required when evaluating tax positions in accordance with ASC 740, Income Taxes .
A valuation allowance is provided when it is more likely than not that some or all of a deferred tax asset will not be realized. Significant judgments are required when evaluating tax positions in accordance with ASC 740, Income Taxes .
Basis of Presentation Our consolidated statement of operations data for the years ended December 31, 2024 and 2023 and our consolidated balance sheet data as of December 31, 2024 and 2023 have been derived from our audited consolidated financial statements included in Financial Statements and Supplementary Data .
Basis of Presentation Our consolidated statement of operations data for the years ended December 31, 2025 and 2024 and our consolidated balance sheet data as of December 31, 2025 and 2024 have been derived from our audited consolidated financial statements included in Financial Statements and Supplementary Data .
We are focused on discovering, developing, and commercializing products that address medical conditions with significant unmet needs in the areas of oncology, immunology, neuroscience, and infectious disease. We intend to leverage our competencies and resources to positively impact human health in Greater China and worldwide.
We are focused on discovering, developing, and commercializing products that address medical conditions with significant unmet needs in the areas of oncology, immunology, neuroscience, and infectious disease. We intend to leverage our competencies and resources to positively impact human health.
We further discuss in MD&A below key factors affecting our results of operations, key components and primary drivers of changes in our results of operations in 2024, and our liquidity and capital resources.
We further discuss in MD&A below key factors affecting our results of operations, key components and primary drivers of changes in our results of operations in 2025, and our liquidity and capital resources.
In 2025, we seek to continue advancing our mission of becoming a leading global biopharmaceutical company, driving innovation in treatment options for patients in China and beyond, by focusing on the following corporate strategic goals: accelerate medicines to patients through our R&D activities; expand and strengthen our global and regional pipelines through our internal discovery efforts and synergistic collaborations and corporate development activities; and continue our commercial excellence and execution, including by delivering strong financial performance as we prepare to launch additional products or new indications for existing products and seek to achieve profitability by the end of 2025.
In 2026, we seek to continue advancing our mission of becoming a leading global biopharmaceutical company, driving innovation in treatment options for patients in China and beyond, by focusing on the following corporate strategic goals: accelerate medicines to patients through our R&D activities; expand and strengthen our global and regional pipelines through our internal discovery efforts and synergistic collaborations and corporate development activities; and continue our commercial excellence and execution, including by delivering strong financial performance as we prepare to launch additional products or new indications for existing products as we advance along our path to profitability.
For more information on our commercial products and product pipeline, including status and developments in 2024, see Business – Our Commercial Products and Operations and Business – Our Pipeline of Product Candidates and R&D Activities . We also continued to strengthen our business through key new additions to our global leadership team. For example, after we promoted Dr.
For more information on our commercial products and product pipeline, including status and developments in 2025, see Business – Our Commercial Products and Operations and Business – Our Pipeline of Product Candidates and R&D Activities . We also continued to strengthen our business through key new additions to our global leadership team. For example, we appointed Dr.
For our global assets, we had promising results from the global Phase I study of ZL-1310, a potential first-in-class and best-in-class DLL3-targeted ADC for the treatment of extensive stage SCLC, and promising pre-clinical data for ZL-1503, our internally developed IL-13/IL-31R bispecific antibody for atopic dermatitis.
For our global assets, we had promising results from the global Phase 1 study of zoci, a potential first-in-class and best-in-class DLL3-targeting ADC for the treatment of extensive stage SCLC, and promising pre-clinical data for ZL-1503, our internally developed IL-13/IL-31Rα bispecific antibody for atopic dermatitis.
As of December 31, 2024, we had cash and cash equivalents, current restricted cash, and short-term investments of $879.7 million, which we expect will enable us to meet our cash requirements including the funding of operating expenses, capital expenditures, and debt obligations for at least the next 12 months.
As of December 31, 2025, we had cash and cash equivalents, current restricted cash, and short-term investments of $789.6 million, which we expect will enable us to meet our cash requirements including the funding of operating expenses, capital expenditures, and debt obligations for at least the next 12 months.
As of December 31, 2024, we also may in the future be required to pay sales-based milestone payments of up to an -80- additional aggregate amount of $2,620.0 million as well as certain royalties at tiered percentage rates on annual net sales.
As of December 31, 2025, we also in the future may be required to pay sales-based milestone payments of up to an -82- additional aggregate amount of $2,328.0 million as well as certain royalties at tiered percentage rates on annual net sales.
As of December 31, 2024, we may in the future be required to pay development and regulatory milestone payments of up to an additional aggregate amount of $211.5 million for our current clinical programs and $766.9 million for other programs.
As of December 31, 2025, we may in the future be required to pay development and regulatory milestone payments of up to an additional aggregate amount of $170.0 million for our current clinical programs and $507.0 million for other programs.
Net Loss Net loss was $257.1 million in 2024, or a loss per ordinary share attributable to common stockholders of $0.26 (or loss per ADS of $2.60), compared to a net loss of $334.6 million in 2023, or a loss per ordinary share of $0.35 (or loss per ADS of $3.46). -83- Critical Accounting Policies and Significant Judgments and Estimates We prepare our financial statements in conformity with U.S.
Net Loss Net loss was $175.5 million in 2025, or a loss per ordinary share attributable to common stockholders of $0.16 (or loss per ADS of $1.60), compared to a net loss of $257.1 million in 2024, or a loss per ordinary share of $0.26 (or loss per ADS of $2.60). -85- Critical Accounting Policies and Significant Judgments and Estimates We prepare our financial statements in conformity with U.S.
Business Developments and Corporate Strategic Goals In 2024, we continued to demonstrate strong financial performance, with a 50% increase in total revenue to $399.0 million and a 23% decrease in net loss to $257.1 million compared to the prior year.
Business Developments and Corporate Strategic Goals In 2025, we continued to demonstrate strong financial performance, with a 15% increase in total revenue to $460.2 million and a 32% decrease in net loss to $175.5 million compared to the prior year.
Although we believe that we have sufficient capital to fund our operations for at least the next twelve months, we may, from time to time, identify opportunities to access capital through debt arrangements on favorable commercial terms.
Although we believe that we have sufficient capital to fund our operations for at least the next twelve months, we may, from time to time, utilize debt arrangements on favorable commercial terms or consider additional funding sources to -87- bring to fruition our strategic objectives.
Foreign Currency Losses Foreign currency losses increased by $0.3 million in 2024, primarily driven by increased remeasurement loss due to depreciation of the RMB against the U.S. dollar.
Foreign Currency Gains (Losses) Foreign currency gains were $19.6 million in 2025 primarily driven by remeasurement gain due to appreciation of the RMB against the U.S. dollar, compared to foreign currency losses of $15.1 million in 2024 primarily driven by remeasurement loss due to depreciation of the RMB against the U.S. dollar.
For information on our research and development activities and related expenditures see the Research and Development Expenses , Selling, General, and Administrative Expenses , License and Collaboration Arrangements , and Results of Operations sections above.
For information on our research and development activities and related expenditures, see the Research and Development Expenses , Selling, General, and Administrative Expenses , License and Collaboration Arrangements , and Results of Operations sections above. In addition, as of December 31, 2025, we had commitments of $1.7 million related to commercial manufacturing development activities and capital expenditures.
Our ability to generate profits and positive cash flow from operations over the next several years depends upon our ability to successfully market our commercial products and to successfully expand the indications for these products and develop and commercialize our other product candidates.
Our ability to generate profits and positive cash flow from operations depends upon our ability to successfully market our commercial products and to successfully expand the indications for these products and develop and commercialize our other product candidates. As discussed further below, we expect to continue to incur substantial costs related to our research and development and commercialization activities.
Net Cash Used in Financing Activities Net cash provided by financing activities was $349.9 million in 2024, compared to net cash used in financing activities of $6.4 million in 2023.
Net Cash Provided by (Used in) Investing Activities Net cash provided by investing activities was $307.9 million in 2025, compared to net cash used in investing activities of $375.2 million in 2024.
The following table presents information regarding our cash flows ($ in thousands): Year Ended December 31, Change 2024 2023 $ Net cash used in operating activities (214,869) (198,178) (16,691) Net cash used in investing activities (375,193) (10,776) (364,417) Net cash provided by (used in) financing activities 349,889 (6,433) 356,322 Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash (310) (2,622) 2,312 Net decrease in cash, cash equivalents and restricted cash (240,483) (218,009) (22,474) Net Cash Used in Operating Activities Net cash used in operating activities increased by $16.7 million in 2024, primarily due to a decrease of $77.5 million in net loss and an increase of $13.8 million in adjustments to reconcile net loss to net cash used in operating activities, partially offset by a decrease of $108.0 million in net changes in operating assets and liabilities.
The following table presents information regarding our cash flows ($ in thousands): Year Ended December 31, Change 2025 2024 $ Net cash used in operating activities (150,789) (214,869) 64,080 Net cash provided by (used in) investing activities 307,866 (375,193) 683,059 Net cash provided by financing activities 72,353 349,889 (277,536) Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash 478 (310) 788 Net increase (decrease) in cash, cash equivalents and restricted cash 229,908 (240,483) 470,391 Net Cash Used in Operating Activities Net cash used in operating activities decreased by $64.1 million in 2025, primarily due to a decrease of $81.6 million in net loss and an increase of $13.7 million in net changes in operating assets and liabilities, partially offset by a decrease of $31.2 million in adjustments to reconcile net loss to net cash used in operating activities.
This shift was primarily due to an increase of $216.1 million in proceeds from issuance of ordinary shares upon public offerings net of offering costs, an increase of $131.6 million in proceeds from short-term debt, and a decrease of $8.8 million in taxes paid related to settlement of equity awards.
Net Cash Provided by Financing Activities Net cash provided by financing activities decreased by $277.5 million in 2025, primarily due to a decrease of $216.9 million in proceeds from issuance of ordinary shares upon public offerings net of offering costs, an increase of $138.6 million in repayment of short-term bank borrowings, an increase of $8.2 million in taxes paid related to settlement of equity awards, partially offset by an increase of $75.2 million in proceeds from short-term debt and an increase of $10.5 million in proceeds from exercises of stock options.
Research and Development Expenses The following table presents the components of our research and development expenses ($ in thousands): Year Ended December 31 Change 2024 2023 $ % Personnel compensation and related costs 106,154 115,749 (9,595) (8) % Licensing fees 30,997 19,291 11,706 61 % CROs/CMOs/Investigators expenses 69,870 103,333 (33,463) (32) % Other costs 27,483 27,495 (12) — % Total 234,504 265,868 (31,364) (12) % Research and development expenses decreased by $31.4 million in 2024 primarily due to: • a decrease of $33.5 million in CROs/CMOs/Investigators expenses related to ongoing clinical trials; and • a decrease of $9.6 million in personnel compensation and related costs primarily driven by the Company’s ongoing resource prioritization and efficiency efforts; partially offset by • an increase of $11.7 million in licensing fees in connection with increased upfront and milestone payments for our license and collaboration agreements.
Research and Development Expenses The following table presents the components of our research and development expenses ($ in thousands): Year Ended December 31 Change 2025 2024 $ % Personnel compensation and related costs 87,894 106,154 (18,260) (17) % Licensing fees 30,597 30,997 (400) (1) % CROs/CMOs/Investigators expenses 73,763 69,870 3,893 6 % Other costs 28,650 27,483 1,167 4 % Total 220,904 234,504 (13,600) (6) % Research and development expenses decreased by $13.6 million in 2025, primarily due to: • a decrease of $18.3 million in personnel compensation and related costs primarily driven by the Company’s ongoing resource prioritization and efficiency efforts; partially offset by • an increase of $5.1 million in CROs/CMOs/Investigators expenses and other costs related to ongoing clinical trials.
In 2025, we expect our revenues to continue to increase for our existing and more recently launched commercial products. -78- We also continued to make progress across our product pipeline.
In 2026, we expect our revenues to -80- continue to increase primarily driven by our existing commercial products and recently approved products or indications that are expected to be launched this year. We also continued to make progress across our product pipeline.
The following table presents our research and development expenses by program ($ in thousands): Year Ended December 31 Change 2024 2023 $ % Clinical programs 86,126 112,158 (26,032) (23) % Pre-clinical programs 31,913 17,356 14,557 84 % Unallocated research and development expenses 116,465 136,354 (19,889) (15) % Total 234,504 265,868 (31,364) (12) % Research and development expenses attributable to clinical programs decreased by $26.0 million in 2024 primarily driven by a decrease of $28.7 million in CROs/CMOs/Investigators expenses related to the progress of existing studies, offset by an increase of $2.7 million in licensing fees.
The following table presents our research and development expenses by program ($ in thousands): Year Ended December 31 Change 2025 2024 $ % Clinical programs 86,934 86,126 808 1 % Pre-Clinical programs 24,293 31,913 (7,620) (24) % Unallocated research and development expenses 109,677 116,465 (6,788) (6) % Total 220,904 234,504 (13,600) (6) % -84- Research and development expenses attributable to pre-clinical programs decreased by $7.6 million in 2025, primarily driven by a decrease of $9.4 million in licensing fees, partially offset by an increase of $1.8 million in CROs/CMOs/Investigators expenses and other costs related to newly initiated studies.
In 2024, we entered into four such debt arrangements with Chinese financial institutions that allow certain of our subsidiaries to borrow up to approximately $198.9 million (or RMB1,421.7 million) to support our working capital needs in mainland China. As of December 31, 2024, we had short-term debt of approximately $131.7 million (or RMB946.8 million) pursuant to these debt arrangements.
We have also identified opportunities to access capital through debt arrangements on favorable commercial terms. As of December 31, 2025, we had such debt arrangements with Chinese financial institutions that allow certain of our subsidiaries to borrow up to approximately $317.4 million (or RMB2,271.7 million) to support our working capital needs in mainland China.
In addition, we have raised approximately $164.6 million in private equity financing and approximately $2,677.8 million in net proceeds after deducting underwriting commissions and the offering expenses payable by us in our initial public offering and subsequent follow-on offerings on Nasdaq and our initial public offering on the Hong Kong Stock Exchange.
We have raised approximately $164.6 million in private equity financing and approximately $2,677.8 million in net proceeds from public offerings after deducting underwriting commissions and the offering expenses payable by us. Our operations have consumed substantial amounts of cash since inception. The net cash used in our operating activities was $150.8 million and $214.9 million in 2025 and 2024, respectively.
Net Cash Used in Investing Activities Net cash used in investing activities increased by $364.4 million in 2024, primarily due to an increase of $196.0 million purchases of short-term investments, a decrease of $101.4 million in proceeds from maturity of short-term investments, an increase of $54.6 million in acquisition of intangible assets, a decrease of $10.0 million in proceeds from sale of intellectual property, and a decrease of $3.9 million in proceeds from land use right, partially offset by a decrease of $1.6 million in purchases of property and equipment.
This shift was primarily due to a decrease of $320.0 million in purchases of short-term investments, an increase of $313.7 million in proceeds from maturity of short-term investments, a decrease of $50.5 million in acquisition of intangible assets, an increase of $1.2 million in proceeds from sale of equity investment, partially offset by an increase of $2.4 million in purchases of property and equipment.
For more information, see Note 12 and Note 22. We may consider, or we may ultimately need, additional funding sources to bring to fruition our strategic objectives, and there can be no assurances that such funding will be made available to us on acceptable terms or at all.
There can be no assurances that such funding will be made available to us on acceptable terms or at all.
For our late-stage regional pipeline, we had positive data readouts during the year, including for KarXT in schizophrenia, and we completed enrollment for the second Phase III study of bemarituzumab for the treatment of gastric cancer.
For our late-stage regional pipeline, we had positive data readouts during the year, including for povetacicept in IgA nephropathy and primary membranous nephropathy.
Interest Income Interest income decreased by $2.7 million in 2024, primarily due to decreased cash and cash equivalents. Interest Expense Interest expense increased by $2.3 million in 2024, primarily due to interest expense on short-term debt we entered into in 2024. We had no such interest expense in 2023.
Interest Income Interest income decreased by $4.1 million in 2025, primarily due to decreased cash and cash equivalents and short-term investments. Interest Expenses Interest expense increased by $3.0 million in 2025, primarily due to increased short-term debts.
Removed
As discussed further below, we expect to continue to incur substantial costs related to our research and development and commercialization activities.
Added
Our revenue increase was primarily driven by XACDURO, driven by strong patient demand and expanding hospital adoption but partially constrained by supply limitations during the year, and NUZYRA, supported by increasing market coverage and penetration. ZEJULA continued to be the leading PARP inhibitor in hospital sales for ovarian cancer despite evolving competitive dynamics within the PARPi class in mainland China.
Removed
Our revenue increase was primarily driven by VYVGART, which has steadily increased sales since its strong commercial launch in September 2023 and initial NRDL listing in January 2024, ZEJULA, which continued to lead PARP inhibitor sales for ovarian cancer in the hospital setting, and NUZYRA, which was supported by the inclusion in the NRDL of its IV formulation for the treatment of CABP and/or ABSSSI in January 2023 and its oral formulation for these indications in January 2024.
Added
In 2025, VYVGART revenue included a $5.6 million rebate related to its NRDL renewal and VYVGART Hytrulo included a $2.4 million rebate following a voluntary price adjustment ahead of the NRDL negotiation.
Removed
Since the fourth quarter of 2024, we are excited to have expanded our commercial portfolio with the launch in mainland China of VYVGART Hytrulo, the subcutaneous formulation of VYVGART, for gMG and CIDP, XACDURO for HABP and VABP caused by ABC, and AUGTYRO for ROS1 + NSCLC. AUGTYRO was included in the NRDL for this indication in January 2025.
Added
In the fourth quarter of 2025, the NMPA approved AUGTYRO for the treatment of adult patients with NTRK+ solid tumors and KarXT for the treatment of adult patients with schizophrenia.
Removed
We have also expanded and strengthened our global and regional pipelines through synergistic business development activities, including a strategic collaboration and worldwide license agreement with MediLink to use MediLink’s TMALIN ADC platform for the development of ZL-6201, a novel potential first-in-class LRRC15 ADC consisting of an antibody discovered by Zai Lab, for the treatment of certain solid tumors and a strategic collaboration with Vertex for the license of povetacicept, a potential best-in-class treatment for IgAN and other B-cell mediated diseases, in mainland China, Hong Kong, Macau, Taiwan, and Singapore.
Added
We have also expanded and strengthened our pipeline through synergistic business development activities, including obtaining exclusive worldwide rights to develop and commercialize ZL-1311, a next generation TCE targeting MUC17 for the treatment of gastric and GEJ cancers, which is expected to enter global clinical development this year.
Removed
Rafael Amado to President, Head of Global Research and Development, expanding his role to encompass our R&D efforts across all of our therapeutic areas in June 2024, we appointed Dr. Prista Charuworn as our Vice President, Immunology, Global R&D to provide strategic leadership and support with respect to the development of our immunology, neuroscience, and infectious disease pipeline.
Added
Shan He as Senior Vice President, Chief Business Officer in September 2025. Dr. He is a respected leader with deep expertise in healthcare strategy, capital markets, and entrepreneurship. She will be responsible for leading and directing strategy for business development and strategic partnerships. We also announced the creation of our Oncology Scientific Advisory Board (“SAB”) in August 2025.
Removed
Our net product revenue increased by $130.9 million in 2024, primarily driven by increased sales for VYVGART since its launch in September 2023 and NRDL listing in January 2024 for the treatment of gMG. Other key drivers of net product revenue growth include increased sales volumes for ZEJULA and NUZYRA in 2024.
Added
This newly formed Oncology SAB is comprised of distinguished oncology leaders and will support the advancement of our robust oncology products and pipeline, including multiple internally developed investigational therapies.
Removed
ZEJULA sales remained strong as it continued to be the leading PARP inhibitor in hospital sales for ovarian cancer in mainland China.
Added
Our product revenue is primarily derived from the sales of our commercial products primarily in mainland China, net of sales returns and rebates to distributors with respect to the sales of these products.
Removed
The growth in NUZYRA sales was supported by the inclusion in the NRDL for its IV formulation for the treatment of CABP and/or ABSSSI in the first quarter of 2023 and for its oral formulation for these indications in the first quarter of 2024.
Added
Our net product revenue increased by $59.6 million in 2025, primarily due to XACDURO, driven by strong patient demand and expanding hospital adoption but partially constrained by supply limitations during the year, and NUZYRA, supported by increasing market coverage and penetration.
Removed
Research and development expenses attributable to pre-clinical programs increased by $14.6 million in 2024, primarily driven by an increase of $9.0 million in licensing fees and an increase of $5.6 million in CROs/CMOs/Investigators expenses related to newly initiated studies.
Added
ZEJULA continued to be the leading PARP inhibitor in hospital sales for ovarian cancer despite evolving competitive dynamics within the PARPi class in mainland China. In 2025, VYVGART revenue included a $5.6 million rebate related to its NRDL renewal and VYVGART Hytrulo included a $2.4 million rebate following a voluntary price adjustment ahead of the NRDL negotiation.
Removed
Although we manage our external research and development expenses by program, we do not allocate our internal research and development expenses by program because our employees and internal resources may be engaged in projects for multiple programs at any given time. -82- Selling, General, and Administrative Expenses The following table presents our selling, general, and administrative expenses by category ($ in thousands): Year Ended December 31 Change 2024 2023 $ % Personnel compensation and related costs 174,958 173,389 1,569 1 % Other costs 123,783 108,219 15,564 14 % Total 298,741 281,608 17,133 6 % Selling, general, and administrative expenses increased by $17.1 million in 2024 primarily due to higher general selling expenses and personnel compensation and related costs for VYVGART, which was launched in September 2023, and NUZYRA, which was first included in the NRDL for its IV formulation in January 2023 and for its oral formulation in January 2024.
Added
Cost of Product Revenue Cost of product revenue increased by $43.4 million in 2025 primarily due to increasing sales volumes and higher inventory provision for VYVGART Hytrulo. Collaboration Revenue and Cost of Collaboration Revenue Collaboration revenue and cost of collaboration revenue related to promotional activities in mainland China increased by $1.6 million and $0.2 million, respectively, in 2025.
Removed
Gain on Sale of Intellectual Property We had a gain on sale of intellectual property of $10.0 million in 2023 in connection with our sale of certain patent rights and related know-how to a third party. We had no such gain or loss in 2024.
Added
Although we manage our external research and development expenses by program, we do not allocate our internal research and development expenses by program because our employees and internal resources may be engaged in projects for multiple programs at any given time.
Removed
Other Income, Net Other income, net decreased by $1.7 million in 2024 primarily due to the shift from a gain of $2.8 million in 2023 to a loss of $6.1 million in 2024 for our investment in MacroGenics as a result of changes in its stock price, partially offset by an increase of $5.7 million in government grants.
Added
Selling, General, and Administrative Expenses The following table presents our selling, general, and administrative expenses by category ($ in thousands): Year Ended December 31 Change 2025 2024 $ % Personnel compensation and related costs 165,005 174,958 (9,953) (6) % Other costs 112,600 123,783 (11,183) (9) % Total 277,605 298,741 (21,136) (7) % Selling, general, and administrative expenses decreased by $21.1 million in 2025 primarily due to our resource prioritization and efficiency efforts.
Removed
Income Tax Expense Income tax expense was nil in both 2024 and 2023.
Added
Other Income, Net Other income, net decreased by $1.8 million in 2025 primarily due to a decrease of $2.3 million in government grants. Income Tax Benefit Income tax benefit was $2.9 million in 2025 primarily due to the deferred tax assets recognized as of December 31, 2025. We had no income tax benefit or expense in 2024.
Removed
Our operations have consumed substantial amounts of cash since inception. The net cash used in our operating activities was $214.9 million and $198.2 million in 2024 and 2023, respectively.
Added
As of December 31, 2025, we had short-term debt outstanding of $204.5 million (or RMB1,437.6 million) pursuant to these debt arrangements. These debt arrangements provide us with additional capital capacity that will give us enhanced flexibility to execute on our corporate strategic goals. For more information, see Note 11.
Removed
In addition, as of December 31, 2024, we had commitments for capital expenditures of $6.8 million mainly for the purpose of commercial manufacturing development and facilities construction and improvement activities.
Removed
In January 2025, we entered into a working capital loan contract with another Chinese financial institution with respect to a revolving credit facility of up to RMB300.0 million (approximately $41.1 -85- million). These debt arrangements will provide us with additional capital capacity that gives us enhanced flexibility to execute on our corporate strategic goals.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

9 edited+0 added−0 removed15 unchanged
Biggest changeWe had $131.7 million of short-term debt as of December 31, 2024. A 100-basis point increase in interest rates as of December 31, 2024 would not materially increase our interest expense. Our interest rate exposure from short-term debt is also offset by our exposure in cash and cash equivalents, restricted cash, and short-term investments, as discussed above.
Biggest changeAs of December 31, 2025 and 2024, we had short-term debt of $204.5 million and $131.7 million, respectively. A 100-basis point increase in interest rates would not materially increase our interest expense. Our interest rate exposure from short-term debt is also offset by our exposure in cash and cash equivalents, restricted cash, and short-term investments, as discussed above.
The value of RMB is subject to changes in central government policies and to international economic and political developments affecting supply and demand in the -86- China Foreign Exchange Trading System market.
The value of RMB is subject to changes in central government policies and to international economic and political developments affecting supply and demand in the China Foreign Exchange Trading System market.
These -87- notes receivable were used to collect the receivables based on an administrative convenience, given these notes are readily convertible to known amounts of cash. In accordance with the sales agreements, whether to use cash or bank acceptance promissory notes to settle the receivables is at our discretion, and this selection does not impact the agreed contractual purchase prices.
These notes receivable were used to collect the receivables based on an administrative convenience, given these notes are readily -89- convertible to known amounts of cash. In accordance with the sales agreements, whether to use cash or bank acceptance promissory notes to settle the receivables is at our discretion, and this selection does not impact the agreed contractual purchase prices.
As of December 31, 2024 and 2023, all of our cash and cash equivalents, restricted cash, and short-term investments were held by major financial institutions located in mainland China and international financial institutions outside of mainland China which we believe are of high credit quality and for which we monitor continued credit worthiness.
As of December 31, 2025 and 2024, all of our cash and cash equivalents, restricted cash, and short-term investments were held by major financial institutions located in mainland China and international financial institutions outside of mainland China which we believe are of high credit quality and for which we monitor continued credit worthiness.
As of December 31, 2024, our two largest customers accounted for approximately 23% of our total accounts receivable collectively. Certain accounts receivable balances are settled in the form of notes receivable. As of December 31, 2024, such notes receivable included bank acceptance promissory notes that are non-interest bearing and due within six months.
As of December 31, 2025, our two largest customers accounted for approximately 25% of our total accounts receivable collectively. Certain accounts receivable balances are settled in the form of notes receivable. As of December 31, 2025, such notes receivable included bank acceptance promissory notes that are non-interest bearing and due within six months.
The cash and cash equivalents of the Company included aggregated amounts of $19.0 million and $25.1 million, which were denominated in RMB, representing 4% and 3% of the cash and cash equivalents as of December 31, 2024 and 2023, respectively.
The cash and cash equivalents of the Company included aggregated -88- amounts of $25.4 million and $19.0 million, which were denominated in RMB, representing 4% and 4% of the cash and cash equivalents as of December 31, 2025 and 2024, respectively.
As of December 31, 2024 and 2023, we had cash and cash equivalents of $449.7 million and $790.2 million, restricted cash of $101.1 million and $1.1 million, and short-term investments of $330.0 million and $16.3 million, respectively. Our investment portfolio, which relates to cash equivalents and short-term investments, primarily consists of time deposits.
As of December 31, 2025 and 2024, we had cash and cash equivalents of $679.6 million and $449.7 million, respectively, restricted cash of $101.1 million and $101.1 million, respectively, and short-term investments of $10.0 million and $330.0 million, respectively. Our investment portfolio, which relates to cash equivalents and short-term investments, primarily consists of time deposits.
For more information on our short-term debt, see Note 12 and Note 22 .
For more information on our short-term debt, see Note 11 .
As of December 31, 2024 and 2023, we had cash and cash equivalents of $449.7 million and $790.2 million, restricted cash of $101.1 million and $1.1 million, and short-term investments of $330.0 million and $16.3 million, respectively.
As of December 31, 2025 and 2024, we had cash and cash equivalents of $679.6 million and $449.7 million, respectively, restricted cash of $101.1 million and $101.1 million, respectively, and short-term investments of $10.0 million and $330.0 million, respectively.

Other ZLAB 10-K year-over-year comparisons