Zai Lab Ltd Q2 FY2020 Earnings Call

Ladies and gentlemen, thank you for standing by, and welcome to the Zai Lab's First Half 2020 Financial Results and Corporate Progress Update Conference Call. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Mr. Billy Cho, Chief Financial Officer of Zai Lab. Thank you. Please go ahead, sir.

Thank you, operator. Good morning, and welcome to Zai Lab's first half 2020 financial results and corporate update conference call. Earlier this morning, Zai Lab issued a press release providing the details of the company's financial results for the six months ended June 30, 2020, as well as recent corporate updates. The press release is available in the Investor Relations section of the company's corporate website at ir.zailaboratory.com. Today's call will be led by Dr. Samantha Du, Zai Lab's Founder, Chair Person, and Chief Executive Officer. We will be joined by Tao Fu, President and Chief Operating Officer, who will provide more details on our pipeline, including upcoming milestones and commercial progress. Jonathan Wang, Head of Business Development, will also be available to answer questions during the Q&A portion of the call. And because each of us are dialed-in remotely, Samantha will take the lead on the majority of the questions and refer to relevant executives as needed. As a reminder, during today's call, Zai Lab will be making certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including our business plans, objectives, and timing and success of our clinical trials, regulatory applications, and commercial launches. These forward-looking statements are not guarantees of future performance, and therefore, you should not put undue reliance upon them. These statements are subject to numerous risks and uncertainties that could cause actual results to differ materially from what we expect. I refer you to our SEC filings for a discussion of risk factors that could cause our actual results to differ materially from those discussed today. At this time, it is my pleasure to turn the call over to Zai Lab's Founder, Chair Person, and Chief Executive Officer, Dr. Samantha Du.

Thank you, Billy. Hello, everyone, and thank you all for joining us. We have investors across the world so I truly hope everyone and their loved ones are safe and healthy. Despite the headwinds brought on by the COVID-19 pandemic, we continue to build and define Zai Lab's leadership through strong execution. We have achieved many milestones since our last earnings call. We're excited to provide you with a full update and also outline what the future holds for us. Our key accomplishments in 2020 to date include: two successful commercial launches in China; NMPA approvals for Optune; two highly strategic business development deals; three NDAs accepted with priority reviews; 15 CTAs approved; and eight trials initiated across our broad platform, which now includes 14 clinical stage assets. As you can see, we were able to overcome headwinds from the COVID-19 pandemic, launching both ZEJULA and Optune under six weeks from regulatory approval, gaining immediate support from the medical and payer communities given the number of patients with medical needs. ZEJULA launched in China in late January, and Optune was available to patients on June 30. Our clinical pipeline continues to expand with the addition of two highly differentiated late-stage assets, REGN1979 and Repotrectinib. REGN1979 allows Zai Lab to establish a presence in the hematological cancer therapeutic area with exciting opportunities. Repotrectinib is highly synergistic with our existing pipeline. We further strengthened our lung cancer disease area stronghold. With our broad and differentiated pipeline, we remain confident that Zai Lab can become a leading global biopharma company. Over the next three years, we plan to have a steady stream of approvals and commercial launches in Greater China across multiple therapeutic areas, establish transformative partnerships, and advance our internally discovered global pipeline into the pivotal stage. Today, our portfolio consists of four US FDA approved assets with two approved and launched in China; 14 clinical stage assets with nine late-stage development; two internal programs with global rights in the clinic; and over 25 clinical trials planned or ongoing across oncology, infectious, and autoimmune diseases. Looking to the end of 2020 and into the New Year, we'll look to propel our strong momentum forward as we expect to execute our commercial strategy for ZEJULA and Optune in China. We will start preparing for additional product launches, expedite the development of our late-stage assets for approval, deliver key clinical readouts, and continue to bring in potential best-in-class or first-in-class assets through bolt-on and transformational business development opportunities. We're proud of our global reputation as a biotech pioneer and a partner of choice in China. I am confident that with our team, strategy, and platform, we will continue to deliver exceptional execution and growth. This belief drives me to say that, in the next three years, Zai can expand to become a leading global biopharma company. We've also reached a significant milestone in 2020 by becoming a commercially listed company in Mainland China. Our commercial launches for both ZEJULA and Optune are underway and off to a great start. While it's still early to comment on the launch trajectory for ZEJULA and Optune in China, we believe there is significant commercial opportunity for both assets. Importantly, we are excited about lifecycle management opportunities for both products, and we're working closely with our partners, GSK and Novocure, to aggressively expand into traditional indications. We continue to strengthen our human capital and global footprint. As of June 30, 2020, we had 859 employees across seven offices globally, with 366 and 377 employees engaged in R&D and commercial activities, respectively. As one of the leading biotechs and an employee choice, I am confident that we'll continue to attract top talent across all levels in different regions to continue to grow with the firm. I am pleased to say, this is a very exciting time for Zai Lab, and our strategic mission is on a global scale. We believe we have the experience and resources required to successfully reach our goal, and our execution track record speaks for itself. As always, we thank you for your continued interest and support. We look forward to keeping you updated with all of our upcoming activities. With that said, I would now like to turn the call over to our President and COO, Tao Fu.

Thank you, Samantha. As Samantha mentioned, 2020 year-to-date has been a productive and exciting period for Zai Lab across a variety of fronts. We continue to build momentum within our commercial organization with the successful launches of ZEJULA and Optune. We executed two highly strategic business development deals, establishing the new hematological cancer therapeutic area and strengthening our solid tumor disease stronghold with the addition of a potential best-in-class targeted therapy. In addition, we expanded our China commercial organization and our global R&D team through the recruitment of top-level talent, and significantly strengthened our balance sheet to further enable Zai Lab to bring many more important therapies to patients. While our press release from this morning provides detailed updates across most of our programs, I'd like to focus my comments today on a few selected programs and near-term catalysts. That said, we'll be happy to answer any questions during the Q&A session for any assets that are not covered in our prepared remarks. I'll start with niraparib or ZEJULA. Our PARP inhibitor approved globally for the treatment of ovarian cancer and in development for several other solid tumor indications. We believe ZEJULA is a potential best-in-class PARP inhibitor, given it is the only PARP inhibitor approved in the United States as monotherapy for all-comer patients in the first-line and recurrent maintenance treatment settings. In addition, it has superior pharmacological properties, including once-daily dosing, low drug-drug interactions, and the ability to cross the blood-brain barrier. As you know, ZEJULA was launched in China in January for second-line maintenance treatment of ovarian cancer patients with over 800 hospitals covered at the time of launch. As Samantha noted earlier, this commercial launch was done with incredible speed, with launch events held both on-site and online. Since the launch, ZEJULA has been included in regional reimbursement in one province and six cities. It has also been listed in 16 commercial health insurances and four provincial and municipal level customized commercial insurance, underscoring Zai Lab's execution capability in winning important therapies for patients. In addition to executing on our launch, Zai continues to focus on expanding the commercial opportunity for ZEJULA. Our sNDA for ZEJULA as a first-line maintenance treatment for ovarian cancer patients is currently under priority review by the NMPA. This submission was based on the results from the PRIMA study, which demonstrated that women in both the HRD positive and HRD negative subgroups experienced clinically meaningful and statistically significant benefit. In May, Zai announced positive top line results from the Phase III NEURO study of ZEJULA as maintenance therapy for Chinese patients with platinum-sensitive, recurrent ovarian cancer. The clinical data in Chinese patients confirmed the compelling clinical profile of ZEJULA and were consistent with the results seen in the global NORA study. Importantly, the NORA study demonstrated that an individualized starting dose regimen at 200 milligrams preserved efficacy while improving the safety profile in Chinese patients, particularly concerning the reduction of hematological toxicities, including thrombocytopenia and anemia. These results further underscore the promise of ZEJULA as a best-in-class ovarian cancer treatment. Looking ahead, our plan is to continue to develop ZEJULA and to bring this innovative medicine to as many patients as possible, including in tumors beyond ovarian cancer. Tumor Treating Fields. The China NMPA has approved the marketing authorization application for Optune in combination with temozolomide for the treatment of patients with newly diagnosed GBM and also as a monotherapy for the treatment of patients with recurrent GBM. It is the first innovative treatment approved for GBM in China in over 15 years and the first therapeutic medical device approved by the NMPA without the need for a clinical trial in China. Importantly, Tumor Treating Fields is recommended with Level 1 evidence for newly diagnosed GBM patients in China's Glioma Treatment Guideline, recognizing its breakthrough treatment effect. In addition, we recently launched Optune LUA for the treatment of malignant pleural mesothelioma in Hong Kong and expect to file the MAA in China in the first half of 2021. While mesothelioma is not a large indication in China, the approval will be very synergistic and strategic for us, as the next potential label expansion opportunity is in non-small cell lung cancer. Speaking to that, Novocure expects to announce interim results from its LUNAR Phase III trial in non-small cell lung cancer in 2021. We also have an ongoing Phase II pilot clinical trial in first-line gastric cancer, which is enrolling well. To give you a sense of market potential for these potential label expansions, the annual incidence rate in China for lung cancer and gastric cancer are over 733,000 and 679,000 diagnosed patients, respectively, according to the 2015 National Cancer Statistics. Now on to Ripretinib. Our investigational KIT and PDGFR-alpha kinase switch control inhibitor licensed from Deciphera. In May 2020, Deciphera announced that FDA granted full approval to Ripretinib or QINLOCK for the treatment of fourth-line gastrointestinal stromal tumors or GIST in the all-comer setting. Ripretinib targets a broad spectrum of KIT and PDGFR-alpha mutations known to drive GIST. Since the FDA approval, the NMPA has accepted our NDA filing with priority review. The magnitude of the unmet need for GIST patients in China is significant, with over 30,000 Chinese patients diagnosed every year. We believe the NMPA granting priority review underscores the potential of Ripretinib to alter the treatment landscape for GIST patients, especially for those who are refractory to prior therapies, and we look forward to working closely with the agency to advance this important therapy toward approval. And finally, an update on our partnerships with Regeneron and Turning Point therapeutics, respectively. REGN1979, an innovative CD20 CD3 bispecific antibody, is Regeneron's most advanced oncology pipeline product discovered through their proprietary bispecific platform. It is being developed as a treatment for NHL, such as follicular lymphoma and diffuse large B-cell lymphoma in potentially registrational Phase II trials. This strategic collaboration will support the enrollment of Chinese patients into Regeneron's global trials, accelerating the development and potential approval of this promising medicine. We are thrilled to partner with Regeneron, a global leader in the research and development of innovative medicines, and excited about the potential of REGN1979 as an off-the-shelf immuno-oncology treatment for NHL patients. More recently, Zai Lab was granted exclusive rights to develop and commercialize Repotrectinib, Turning Point's lead drug candidate in Greater China. Repotrectinib is an investigational next-generation tyrosine kinase inhibitor designed to effectively target ROS1 and TRK mutations. In early clinical trials, it demonstrated potential best-in-class efficacy in both TKI-naïve or TKI-pretreated patients. Zai Lab anticipates opening additional sites for the Phase II registrational clinical studies. If approved, Repotrectinib has the potential to be the standard of care for ROS1-positive patients, who constitute about 2% to 3% of all advanced non-small cell lung cancer patients in China, representing a significant commercial opportunity. With that, I will hand the call over to Billy Cho, our Chief Financial Officer, who will provide an overview of our financial highlights.

Thanks, Tao. I’ll now review our financial results for the six months ended June 30, 2020. Revenues for the period were $19.2 million compared to $3.4 million over the same period in 2019. Revenues for the period were comprised of $13.8 million in sales of ZEJULA and $5.4 million in sales of Optune, respectively. Launched in January 2020, ZEJULA's revenue in Mainland China was the main driver for the first half of 2020, given that Optune was commercially made available in China at the end of June. R&D expenses were $1.2 million for the period, compared to $58.9 million for the same period in 2019. The increase in R&D expense was primarily attributable to increased fees in connection with upfront and milestone payments, ongoing and newly initiated late-stage clinical trials, payroll and payroll-related expenses from increased R&D headcount, and expansion of research efforts to support internal development programs. Selling, general, and administrative expenses were $42.5 million for the period, compared to $29.5 million for the same period in 2019. The increase was primarily due to payroll and payroll-related expenses from increased commercial headcount and related costs as Zai Lab expanded its commercial operations in China. For the six months ended June 30, 2020, Zai Lab reported a net loss of $128.6 million, or a net loss per share attributable to common stockholders of $1.74, compared to a net loss of $83.3 million, or net loss per share attributable to common stockholders of $1.37 at the same period in 2019. As of June 30, 2020, cash and cash equivalents, restricted cash and short-term investments totaled $464.1 million. We would now like to turn the call back over to the operator so we can go ahead and take your questions.

Thank you. Ladies and gentlemen, we will now begin the question-and-answer session. Our first question comes from the line of Yigal from Citi Group. Please ask a question.

Hi, thanks very much for taking the question. I had a few questions on ZEJULA’s launch. I know it’s early days, but can you provide any early sense as to the market share that you have in second-line ovarian cancer? And are you seeing early evidence of doctors switching patients from Lynparza to ZEJULA? And then could you comment at all to the extent to which you are seeing an uptick in the regional hospitals, in addition to the urban hospitals? And are you seeing any off-label sales of ZEJULA in first-line ovarian cancer?

Thank you, Yigal. Good morning. And let me answer your last one first. First of all, we never do off-label sales. Secondly, as I already mentioned, I myself and Tao mentioned, even though it's still early for ZEJULA to see the launch trajectory, we are very, very optimistic about how deeply we penetrate into the market and how the product is being received by the patient and the medical community. As you know, we're still currently under self-pay. So with that self-pay, we focus very much on the KOLs and PIs. We also work with different insurance groups and various regional governments. So we have very good coverage for the product. Even though it's only six months post-launch, we have seen a very deep penetration into the hospital sectors. For some context, we have achieved four times the hospital list compared to the competitors in the first two quarters of launch. I hope that gives you some insight on how we have been doing.

Okay. Any early evidence of switching from Lynparza to ZEJULA, or is that not information you can glean at this point?

I think it's too early to tell, but the fact that we have a very strong trajectory looking forward, we still have first-line where we'll have only first-line all-comer approval. We are very optimistic about the future.

Okay. And then just a question on the first-line. So you have the priority review. When are you expecting that decision from the NMPA?

That's a good question. We received the priority review, and soon after we filed, it was accepted. As you know, China does not have a PDUFA date. But I can give you some color on our experience. For second-line ovarian cancer, we were able to get approval within a year. Since this product first-line was accepted in March, assuming everything goes as usual, which we haven’t seen that much difference in terms of regulatory approvals, we are looking for a decision in the first half of 2021. But again, I want to emphasize there's no PDUFA date. This is based on our knowledge.

Okay. Thank you. And then just very quickly on your proprietary program pipeline, which we haven't talked about much. You said in the press release that you started dosing in the Phase 1 very recently for ZL-1201 and ZL-1102. Do you have any sense as to when we could see the first data from those two studies? Hello?

Oh, sorry, I muted. Thank you, Yigal.

Okay.

As we mentioned, we just started patient recruitment this year. We will update the market as we have clearer, concrete data.

Okay. Thanks, Samantha. Thanks for taking the questions.

Thank you, Yigal.

Thank you. Next question comes from the line of Anupam Rama from J.P. Morgan. Please ask your question.

Hi, guys. Thanks so much for taking the question. And congrats on all the progress. For ZEJULA and Optune launch, can you give us a sense of what you are seeing in terms of unique prescribers for each of the products and what you are seeing in terms of repeat prescribing? Thanks so much.

Anupam, good morning. That's a great question. I will let Tao give you some top-line answers on that.

Yes, Anupam. Thanks for the question. I think it's still a bit too early to really give you detailed information on new starts versus repeat use. But as Samantha mentioned, we really feel the dual launch has been off to a great start. We need to keep in mind; this launch is done in record speed from approval in the middle of the pandemic. The team has really done a great job in terms of implementing our launch programs. We have a few important metrics we track, as Samantha indicated, everything is tracking very well. Overall, the product has been very well received by the treatment physicians, and they really latch on to the superior pharmacological profiles of the product and the very compelling clinical data that we have both from the global study. We recently completed an oral study, which is a large China-only study, demonstrating the product's strong profile for preserving efficacy and potentially reducing safety profiles.

Great. Thanks for taking our question.

Thank you.

You're welcome.

Thank you. Our next question comes from the line of Jonathan Chang from SVB Leerink. Please go ahead.

Hi guys. Thanks for taking my questions, and congrats on the progress. First question, can you give us a sense of how the first half sales broke down by Hong Kong versus Mainland China?

Jonathan, good morning. First of all, let me say we had a very good year, good first half in Hong Kong. Since we launched in China, I would say the majority of the revenue is actually contributed from Mainland China. If you look at the overall product, the first two quarters have given us extremely strong momentum. We currently do not have the breakdown by region since we report the total sales for the product.

Got it. Thank you. And just second question, how should we be thinking about additional business development opportunities in the second half of the year and 2021? Would you expect these potential deals to focus on indications where you already have presence, or could these be in indications outside your existing areas of focus? And would you have a bias towards certain platforms and approaches? Thank you.

That is a great question, Jonathan. I like the way you asked that because I can turn the table to Jonathan, our Head of BD. So we can both tackle that. Jonathan?

Thanks, Samantha. And thanks, Jonathan, for the question. Let me first say that at Zai, we have really built a strong reputation over the last few years as a partner of choice for western companies when it comes to this part of the world. We also have a very robust business development pipeline currently in the backlog. Most of these are, by the way, inbound interests from reputable U.S. companies. A lot of them have the strategic objective of accessing the Chinese market quickly while accelerating their global development. Now specifically in terms of the second half, I think we have had a very good first half. We completed two great strategic deals, one with Regeneron and one with Turning Point, both late-stage assets which are arguably potentially best-in-class products in their categories. We are working hard to expedite those timelines in China. You can expect us to always keep that same quality high bar that we uphold to, which is globally best-in-class or first-in-class assets. Obviously, oncology or immune infectious diseases are our priority areas, especially oncology, where we have several indications and areas where we are building disease strongholds. I think we would also potentially not rule out going into other areas or adjacencies just like we have done going from solid tumors into hematological oncology with the Regeneron deal. We won't commit to a number in the second half of this year, but we're working very hard, and I’m sure we’ll bring many more good deals in the very near future.

Got it. Thanks for taking the questions.

Thank you. Our next question comes from the line of Maury Raycroft from Jefferies. Please go ahead.

Hi, good morning, everyone. And congrats on all the progress. Thanks for taking my questions. First one just on the Optune MAA. I think prior guidance was for MAA filing in 2020. Is there any particular reason why you're now expecting that to happen in the first half of 2021? Does it have anything to do with the timing of Novocure's LUNAR data? Can you talk more about what you are going to be looking for in the LUNAR data in 2021?

First of all, the Optune filing and the second indication are underway. We are making very good progress, and we anticipate the first half of next year. This is consistent with our estimation. Even though there’s approval in terms of material impact, this is relatively small, but strategically, this is very important. This would be the first solid tumor to be approved, and we remain optimistic on our timeline.

Got it. That's helpful. And then for the anti-infectives programs, I'm just wondering if there's a newfound sense of urgency from China regulators to get these approved. For Durlobactam for the Phase 3, if you could talk more about the design of that study – design and timing for that Phase 2 study?

First, for Omadacycline, as you saw from our news release, that was on priority review. Ever since China opened priority review for the market, this drug has been the first antibacterial resistance drug put on priority review. China does not have a PDUFA date, so it’s not wise for us to give you a projection, but we are working closely with the agency on this important product. The bacterial resistance issue in China represents a very important area with a lot of unmet medical needs. We'll provide more detailed timelines when the information is solidified. The second question, about the coverage gram-negative program, in terms of patient recruitment, we have done well, and there hasn’t been any disruption despite COVID-19. However, as this is a global trial, we need to collaborate with our partners for more details on global timelines and trial design; we would prefer to rely on their disclosure on this.

Got it. Thank you very much for taking my questions.

Thank you. Our next question comes from the line of Seamus Fernandez from Guggenheim. Please go ahead.

Great. Thanks for the question. So just a few here. I was hoping Samantha if you could just give us an update on data catalysts that you are most focused on, in particular, if you could just give us a sense of where you are most focused in your collaboration with MacroGenics? And then as a separate question can you just help us understand how you are thinking about the CD47 landscape in China as you introduce your novel therapy? Any potential differentiating characteristics of that antibody that you think are worth noting?

Sure. Thank you, Seamus, for these excellent questions. Let me answer the last one, CD47, first. We have done extensive preclinical work and see clear differentiation from our internal work. CD47 will provide a lot of combination synergy with our existing pipeline. We understand there are seven other CD47 candidates under development; however, none has been approved. We're confident with what we've seen so far, the differentiation justifies proceeding and the combo opportunity justifies our moving this program forward. When we have more clinical data and are closer to generating publications, we will communicate that information. Regarding margetuximab and our focus with the MacroGenics collaboration, we hold promising data with gastric cancer being a large indication in China. The very early but promising data that they have observed in earlier trials represents a strong focus for us. They disclosed data for the 013 trial at ASCO that illustrates very promising results not only as monotherapy but also in combination with margetuximab in various hard-to-treat patient populations.

Great. And maybe just as a follow-up question to the CD47. We're also starting to see some CD47 bispecifics emerge with PD-1, CD47 bispecific. Any thoughts – are bispecifics part of your own internal development pipeline? And then maybe finally, I don't think anybody's asked about the COVID-19 dynamics in China. Just wanted to get an update on your experience as you deploy your sales reps in the field and the ability to successfully recruit clinical studies versus what we might be seeing in other markets that appear to be more affected than China. It seems like that's a unique opportunity to continue to drive your research collaborations. And with that I’ll jump back in the queue. Thanks so much.

Please go ahead.

Thank you. Our next question comes from Ziyi Chen from Goldman Sachs. Please go ahead.

Amber, do you want me to answer Seamus's question first?

Please go ahead.

Seamus, I understand your point about bispecifics. However, our focus is on the CD47 program and the existing combo opportunities. We will evolve as we move forward on bispecifics, but we are still concentrating on the CD47 program itself. When it comes to COVID-19, Zai Lab has been fortunate even during these challenging times. While the global situation remains uncertain, we have been able to maintain our operations without significant impact. Our team has done an outstanding job navigating this difficult period. Our employees, having implemented safety measures, have remained unaffected. Regarding clinical trials, I can't speak to other companies' experiences, but we have experienced very limited disruption so far. Our commercial team has been proactive in adapting to these challenges, leading to an impressive launch under demanding conditions.

Thank you. Our next question comes from Ziyi Chen from Goldman Sachs. Please go ahead.

Thank you. This is Ziyi from Goldman. Congratulations on the second quarter. I have two questions. First, regarding ZEJULA, there will be a national reimbursement list negotiation in the second half, probably like October, November. What is the strategy towards getting onto the national reimbursement list for ZEJULA? Should we expect potential pricing cuts, or is it more about the trade-off between pricing and hospital penetration? Given we have already penetrated over 800 hospitals, do we require reimbursement in the first year for better coverage, or can we afford to wait a year for this process?

Thank you for those questions. Regarding ZEJULA, while we believe having NRDL inclusion will significantly enhance our coverage and penetration beyond the top tier cities, we also have done well in our coverage with around 800 to 900 hospitals already. While reimbursement will provide additional revenue upside, we are open to discussions for a reasonable pricing strategy that reflects the value of ZEJULA as the only monotherapy option for first-line patients, and I'm optimistic about working with agencies regarding pricing.

Got it. Thank you, Samantha.

You're welcome.

I'm trying to understand better the commercialization strategy for Optune, which is the first innovative medical device. If patients have to purchase the device, can you explain how commercial health insurance accelerates adoption? What is your overall commercialization strategy?

Optune is the first innovative treatment approved for GBM in China in over 15 years and is also the first medical device approved by the NMPA without the need for clinical trials. Our launch in this market is met with excitement, and patients will be acquiring the device. Our strategy includes targeted outreach to the top hospitals, which comprise a majority of the market opportunity. The reimbursement, both from regional and commercial insurers, helps broaden the accessibility and adoption of our product. So far, the team has been active throughout and continues to build on the strong momentum from the launch.

Got it. Thank you, Billy.

You're welcome.

We are also gearing up to launch Ripretinib and will build a sales force targeted at GI specialists to increase our outreach and create awareness.

Thank you. Our next question comes from the line of Fei Zheng from Credit Suisse. Please go ahead.

Hi, this is Fei. Thanks for taking my question. My first question is about commercialization since we haven't broken down the sales from Mainland China and Hong Kong. Is the sales primarily from Hong Kong? And for ZEJULA, if Hong Kong sales grow at a relatively slow rate, does that mean the majority of the sales comes from Mainland China?

We have done well in Hong Kong, but the majority of our revenue is generated from Mainland China due to its much larger population. We are optimistic about the strong growth in the full year.

My second question is about ZEJULA because I have recently seen that Lynparza has released overall survival data. I’m wondering if we have similar OS data for ZEJULA. If not, when can we expect to see that data?

During GSK's global study for the PRIMA, we do have subgroups in gBRCA, HRD positive and negative. Each category has achieved amazing efficacy. We are gathering our data for the overall survival metrics, and while I cannot specify months, I am confident that we are at least on par with Lynparza.

Okay, thanks for answering my questions.

Sure. Thank you.

Could you elaborate on our internal pipeline, CD47? What are the differentiating factors mainly on safety or efficacy? After completing the Phase 1 study, are we considering licensing opportunities for global trials of this product?

Our CD47 program has shown clear differentiation in terms of efficacy and safety in our preclinical studies. We believe that our engineered antibody with reduced factors may provide strong advantages. As we gather more clinical data from our Phase 1 study, we will evaluate license-out opportunities based on the results. We are highly optimistic about this program's potential. Thank you again for your questions.

Thank you, this is the end of our question-and-answer session; I would now like to hand the conference back to management for closing remarks.

Thank you, operator. I want to thank everyone for taking the time to join us on the call today. We appreciate your support and look forward to updating you periodically on our progress throughout the year. Thank you, everyone. Operator, you can now disconnect this call.

Thank you. Ladies and gentlemen, that concludes your conference for today. And thank you for participating. You may now disconnect.