Hello, ladies and gentlemen. Thank you for standing by and welcome to Zai Lab's Fourth Quarter and Full Year 2024 Financial Results Conference Call. At this time, all participants are in a listen-only mode. Later, we'll conduct a question-and-answer session and instructions will follow at that time. As a reminder, today's call is being recorded. It is now my pleasure to turn the floor over to Christine Chiou, Senior Vice President of Investor Relations. Please go ahead.

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

Thank you, Christine. Good morning, and good evening, everyone. Thank you for joining us today. 2024 was a pivotal year for Zai Lab, marked by strong commercial performance, groundbreaking advancements in our global pipeline and a clear path to profitability. In 2023, we outlined a bold vision for revenue growth, targeting a five-year CAGR of 50% through the end of 2028. We are delivering on this vision. Our total revenue for 2024 grew 50% year-on-year with an exceptional 66% growth in the fourth quarter. VYVGART had an excellent first full year of launch, generating $93.6 million in sales in 2024, making it one of the best immunology launches in China. We made substantial progress in advancing our regional assets. We recently launched several new products, including VYVGART Hytrulo for gMG and CIDP, AUGTYRO for ROS1 non-small cell lung cancer and XACDURO for baumannii infections. We also reported a series of positive data readouts, including KarXT for schizophrenia, Tumor Treating Fields for pancreatic cancer and TIVDAK for cervical cancer, paving the way for multiple launches next year. Furthermore, we're advancing our other innovative assets, including bemarituzumab for first-line gastric cancer, pove for IgAN and ZL-1108 for thyroid eye disease, in addition to exploring additional indications for VYVGART and KarXT. These successes together set the stage for strong revenue growth over the next few years. As a key part of our mission to address unmet medical needs around the world, we took a significant step in 2024 to accelerate our global platform. In October at EMA, we presented compelling early clinical results for ZL-1310, our potential first-in-class and best-in-class DLL3 ADC in small cell lung cancer. Preliminary data demonstrated a 74% ORR, including both confirmed and unconfirmed responses. With further follow-up and additional patients, we continue to see high rates of confirmed responses and we look forward to sharing detailed updates at a major medical conference in the first half of this year. The pace of progress with ZL-1310 has been remarkable, moving from Phase 1 initiation in January 2024 to a potential pivotal trial this year, positioning us for FDA approval in small cell lung cancer in 2027, subject to ongoing regulatory discussions with FDA. As you know, DLL3 is expressed in various other tumor types; we have opened an IND to explore additional indications this quarter to maximize patient benefit. Beyond ZL-1310, we're advancing a broader pipeline of globally differentiated assets, with plans to initiate global trials for an IL-13/IL-31 bispecific antibody for atopic dermatitis and an LRRC15 ADC for solid tumors. Lastly, we have taken decisive actions to optimize our cost structure, improve efficiency across the organization while continuing to invest in key growth drivers. Our loss from operations in the fourth quarter and for the full year improved year-over-year by 45% and 23% respectively. We are on track to reach profitability in the fourth quarter of 2025 and we have a robust cash position of $879.7 million to support our next phase of growth. Today, Zai Lab is at a major value inflection point with a team committed to entrepreneurship, innovation and execution excellence. We look forward to delivering on our goals and capitalizing on the transformative opportunities that lie ahead in 2025 and beyond. We remain confident in our ability to reach our $2 billion revenue target by 2028, supported by strong revenue growth in our current commercial portfolio and the expected launches of multiple additional products or indications in the next few years. With that, I'll pass the call to Josh.

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

Thank you, Josh. Let me begin by highlighting some of the key progress updates in our global pipeline since our last earnings call, along with our next steps. Starting with ZL-1310, a potentially highly active first-in-class DLL3 ADC for small cell lung cancer. We presented promising preliminary monotherapy results from the ongoing Phase 1 trial last year, suggesting that this next-generation ADC therapy has the potential to deliver antitumor responses in the majority of patients with extensive-stage small cell lung cancer, including blind lesions with good tolerability. As Samantha said, we expect to present detailed results at an upcoming major medical conference in the first half of 2025. In January 2025, the US FDA granted orphan drug designation to ZL-1310 for small cell lung cancer, reflecting its potential to treat patients with this aggressive disease. Globally, small cell lung cancer affects around 372,000 patients each year with a low five-year survival rate of 5% to 10%. Treatment options are limited when patients progress with the current standard-of-care result in limited clinical benefit. Despite recent advancements such as tarlatamab, there remains a critical need for readily available treatment options that offer improved efficacy and manageable safety. We are working to address this critical gap with urgency. Enrollment in the monotherapy dose optimization study for second-line small cell lung cancer is progressing rapidly with over 35 patients already dosed. We're also assessing potential combinations in the first-line setting and we have initiated a global Phase 1 dose escalation study evaluating ZL-1310 in combination with PD-L1 and PD-L1 plus chemotherapy. We expect to provide data this year. We also plan to initiate a registrational study in second-line small cell lung cancer this year, positioning us for potential approval in 2027. Regulatory interactions with FDA related to accelerated approval for ZL-1310 are ongoing. DLL3 is also highly expressed in other neuroendocrine tumors and after obtaining IND clearance earlier this month, we will start a global study soon to explore ZL-1310 in these indications. Beyond ZL-1310, we expect to advance at least two additional global assets into Phase 1 development this year, including ZL-6201, a novel LRRC15 ADC for solid tumors and ZL-1503, an IL-13/IL-31 bispecific antibody for atopic dermatitis. We expect to further expand our global pipeline and progress at least one global product into IND-enabling or IND submission stage this year. Now moving to our key late-stage programs. Starting with neuroscience, we achieved a major milestone with KarXT, our M1/M4 cholinergic receptor agonist for schizophrenia. In January 2025, China's NMPA accepted our NDA for KarXT, marking an important step towards bringing the first novel schizophrenia treatment to China in decades. Schizophrenia affects more than 8 million patients in China, with many patients unable to achieve adequate symptom control due to the limited effectiveness and burdensome side effects of currently available treatments. In clinical trials, KarXT demonstrated robust efficacy, achieving statistically significant reductions in all study endpoints while maintaining a tolerable safety profile, free of the side effects of classical antipsychotics. If approved, KarXT could redefine treatments for the millions of patients whose symptoms are inadequately managed by existing treatment options. Moving now to oncology. For Tumor Treating Fields, in December 2024, Zai Lab and Novocure announced that the pivotal Phase 3 PANOVA-3 trial in unresectable locally advanced pancreatic cancer met its primary endpoint, demonstrating a statistically significant improvement in median overall survival versus control. This is the first Phase 3 study to show a survival benefit in this patient population and we plan to file for regulatory approval of Tumor Treating Fields in China in the second half of 2025. In China, approximately 134,000 new cases of pancreatic cancer are diagnosed each year and these patients have limited effective treatment options and a poor prognosis with a median survival of under 12 months. We hope to expand treatment options and improve outcomes for these patients in need. Turning to Tisotumab Vedotin or TIVDAK, our tissue factor ADC for recurrent or metastatic cervical cancer. In January 2025, we reported positive top-line results from the China subpopulation of the global Phase 3 innovaTV 301 study. TIVDAK demonstrated a clinically meaningful improvement in overall survival compared to chemotherapy with a manageable safety profile as observed in the global study. Cervical cancer remains a leading cause of cancer-related deaths in women in China with approximately 150,000 new cases annually. Patients currently have limited treatment options once their cancer recurs or spreads after initial treatment and the current treatments have a different mechanism of action and toxicities. We plan to submit a biologics license application to the NMPA for recurrent metastatic cervical cancer in the first quarter of 2025. For bemarituzumab, we're awaiting the results for both pivotal studies in gastric cancer, starting with FORTITUDE-101, which we expect in the first half of this year and FORTITUDE-102 in the second half of the year. Bemarituzumab has the potential to become the first targeted therapy specifically for FGFR2b positive gastric cancer in China. Next, with our immunology franchise. Efgartigimod continues to demonstrate broad potential across IgG-mediated diseases. Our partner, argenx, announced in November 2024, the decision to advance efgartigimod subcutaneously into the Phase 2/3 ALKIVIA study for idiopathic inflammatory myopathies, IIM or myositis, following promising Phase 2 results. The subtypes of myositis evaluated in this study affect approximately 170,000 patients in China alone with no targeted therapies currently approved. Zai Lab is actively participating in the Greater China cohort of this global registrational trial. We will continue to explore the pipeline in our product potential of efgartigimod to treat other IgG-mediated autoimmune indications, including thyroid eye disease or TED, myositis, seronegative gMG, ocular MG and lupus nephritis. In 2025, we expect top-line results from the global Phase 3 study of seronegative generalized myasthenia gravis and the Phase 2 study of lupus nephritis. We also recently strengthened our regional immunology franchise with two late-stage assets that are highly synergistic with efgartigimod, povetacicept in immunoglobulin A nephropathy and ZL-1108 in thyroid eye disease. Povetacicept is a novel dual BAFF, B-cell activating factor and APRIL, a proliferation-inducing ligand antagonist with best-in-class potential in IgA nephropathy, supported by its compelling Phase 2 data. In China, IgA nephropathy has an estimated prevalence of 3 million to 5 million patients, yet there are currently no approved therapies targeting the underlying cause of the disease. Despite standard-of-care treatments, including ACE inhibitors and steroids, 30% to 40% of patients eventually progress to end-stage renal disease, underscoring the significant need for innovative treatment options. China has already joined the global pivotal trial for povetacicept in IgAN and we are leveraging our regional expertise and established footprint for renal diseases with efgartigimod to accelerate development time lines. We aim to bring this first-in-class therapy to patients expeditiously. ZL-1108 is an anti-IGF-1R antibody, which represents another valuable addition to our regional portfolio. It significantly reduces the treatment burden for thyroid eye disease through shorter infusion times and a more concise course of therapy compared to other anti-IGF-1R therapies. In its Phase 3 studies, ZL-1108 has consistently demonstrated reductions in proptosis, diplopia and CAS across both active and chronic thyroid eye disease. We expect to initiate a China bridging study for TED patients in mid-2025. Thyroid eye disease affects approximately 3.3 million people in China, of which 1 million are diagnosed with moderate to severe forms of the disease. While estimates can vary, the active or acute phase of thyroid eye disease generally lasts between 6 and 24 months, roughly 20% to 30% of the overall disease course, before transitioning into a chronic phase that typically makes up the remaining 70% to 80%. Efgartigimod is under evaluation in the active phase and thus ZL-1108 complements our TED franchise, creating synergies with efgartigimod in both development and commercialization. The wealth of advancements reflects our relentless focus on delivering innovative potential best-in-class or first-in-class therapies to patients with high unmet need. We will continue to execute with speed and precision, advancing our pipeline while exploring new opportunities. I look forward to sharing further updates in the coming quarters. And now Yajing will give an overview of our financial results.

Now I will discuss highlights from our fourth quarter and full year 2024 financial results compared to the prior year period. We had strong top-line growth in the fourth quarter and the full year 2024, driven by increased sales for VYVGART, ZEJULA and NUZYRA. Total net product revenue grew 65% to $108.5 million in the fourth quarter. For the full year, net product revenue was $397.6 million, reflecting robust growth of 49% year-over-year. Our focus on financial discipline and ongoing efficiency efforts was also reflected on the expenses side. R&D expenses for the fourth quarter declined 36% year-over-year and full year R&D expenses declined 12% as late-stage studies completed and as we continue to prioritize our investment to advancing high-value regional and global pipeline programs. SG&A expenses in the fourth quarter were flat year-over-year and a modest 6% increase for the full year was primarily due to higher general selling expenses related to the launch of VYVGART and growing sales for NUZYRA, partially offset by a decrease in G&A expenses and selling expenses for other products. Our loss from operations decreased 45% for the fourth quarter to $67.9 million and 23% for the full year to $282.1 million. When you adjust our loss from operations to exclude certain noncash items, specifically depreciation, amortization and share-based compensation, we had an adjusted loss from operations of $47.6 million in the fourth quarter and $199.6 million for the full year, reflecting year-over-year improvement of 53% and 28% respectively. We are in a strong financial position, ending the quarter with a cash position of $839.7 million. Now turning to our financial outlook for 2025. We expect our 2025 total revenues to be in the range of $560 million to $590 million. This revenue forecast reflects strong growth for the VYVGART franchise, continued growth across our other products, including ZEJULA and NUZYRA and contributions from our newly launched products, AUGTYRO and XACDURO. Lastly, based on our operating plan and our anticipated revenue growth, we expect to achieve profitability in the fourth quarter of 2025. And with that, I would now like to turn the call back over to the operator to open up the line for questions.

Thank you. We will now open the line for questions. Our first question comes from Anupam Rama at JPMorgan. Please go ahead with your question.

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

Hi, Anupam, it's Josh. No, I think if you look at our revenue range, we expect the base business to grow strongly. We'd point to ZEJULA and NUZYRA as particular growth drivers. VYVGART, we expect to grow faster than the overall rate of growth implied in the $560 million to $590 million. And of course we're launching the first full year for AUGTYRO and XACDURO. So we expect some sales there. But I think there, it's just strong performance across the brands. We're excited about the year. Next question, operator?

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

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

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

Thank you, Michael. With regards to the regulatory pathway and speed, we think we have an opportunity to achieve accelerated approval. We are in discussions with regulators and we plan to start that study this year. We've treated a number of patients already that we will present in the first half of this year. And, yes, there are other DLL3 products, but they're much earlier, probably 1.5 years or so behind. So we're confident that we could be the first ones to be approved, and the properties continue to be very similar to what we started to observe with the first patients that we treated. So overall very confident that we will start the study this year and that accelerated approval is a viable pathway.

Very good. Thank you.

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

Hello. This is Yen-Der Li on for Jonathan Chang. Thanks for taking my question. So I have a follow-up question regarding the regulatory strategy for ZL-1310, the DLL3 program. So for the pivotal study, could you share your current view on whether you can do a single-arm study or you would need a randomized controlled study to support the accelerated approval? And how does that influence your thoughts on the 2023 BLA submission timeline? And I have a follow-up question after that. Thanks.

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

Got it. And can I just ask a follow-up question? So can you comment on the 2023, sorry, 2026, the BLA submission timeline relative to the timeline of potential tarlatamab for approval and the timeline of other B7-H3 ADC clinical study readout? Does that like kind of align with what you're thinking? Thank you.

Yes. There are obviously other products there. Tarlatamab has accelerated approval. And it's a very different agent. And obviously, there's been precedents that even with full approval in the same line of therapy, accelerated approval can be granted. There are multiple examples in the hematology field. The mechanism of action is different. The toxicity is different. And so far, the level of activity of 1310 is higher. It's in the 70% range as opposed to 40%. So we're not too concerned about the potential of tarlatamab getting full approval before our PDUFA date. So that's with regards to tarlatamab in the second line. With B7-H3, my sense is that they started or they plan to start a pivotal trial, but we don't really comment on the details of competitors and I actually do not know what their timelines are. All I can say is that our plan is to move as fast as possible with an accelerated approval pathway.

Understood. Thank you so much for answering my questions.

Thank you. Our next question comes from the line of Yigal Nochomovitz from Citi. Please ask your question, Yigal.

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

Yes. Thank you for the question. I'll answer the second question first. We will have data on the various dose escalation doses. And we should have a fair amount of maturity in the earlier doses and definitely enough time for responses to have been confirmed. In addition to that, as we mentioned in the prior quarter, we started the dose optimization. And we've accrued really fast to that randomized cohort of the study. That was 50 patients. And we should have at least the opportunity to be confirmed in the vast majority of patients. So we think we'll have data in about 75 patients or so at different levels of follow-up obviously. With regards to first line, we were pretty active in the first line. We started combinations with PD-L1 inhibitor. And then very soon we're going to start with carboplatin plus PD-L1 inhibitor so a triplet. Our initial goal is to avoid etoposide because it's a very myelosuppressive drug and that's really what tends to limit the length of therapy. But there's been precedence, as you know, of other ADCs that combined with PD-1 inhibitors, checkpoint inhibitors have been able to supplant chemotherapy such as PADCEV in GU. So if you think about the fact that we can get 70% in second line and the response rate in first line is slightly lower than that is in the 50s to 60s. It's not very far-fetched to think that ZL-1310 plus PD-1 inhibitor could be potentially superior to the current standard-of-care. So this is the way we're thinking. Nevertheless, we are going to test the combination with carboplatin, and then we will have to select the dose for ZL-1310 with that combination. We should have data this year on that dose optimization. And then we will have regulatory discussions as to how to move it into frontline.

That makes sense. Super helpful. Thanks for taking my question.

Thank you. We will now take a question from the line of Linhai Zhao from Goldman Sachs. Please ask your question, Linhai.

Thank you for taking my question. I have two inquiries. The first pertains to efgartigimod. With the CIDP and subcutaneous formula expected to be approved in the second half of 2024, I am interested in the real-world patient usage and adoption observations we've seen so far. Additionally, how is the sales breakdown between CIDP and the subcutaneous formula? In the long run, what percentage of sales do you anticipate will come from these two? My second question concerns KarXT. With our NDA accepted in January, we should expect China approval around a year from now. Recently, BMS has reported encouraging feedback and positive trends. However, we know the dynamics in the U.S. market are different. Can you elaborate on the potential differences in schizophrenia treatment between the U.S. and China, and what commercial challenges might arise in China? Also, do you have any updates on the ADP clinical development? Thank you.

Thanks for the question. It's Josh. I'll start and then Rafael can talk a little bit about ADP for KarXT. First, on CIDP, your question about CIDP in VYVGART, just keep in mind that while we received approval by the time we got the product up for commercial launch, it was right at the end of 2024. We do not have NRDL listing for Hytrulo or CIDP in 2025. So I think we expect a relatively limited impact. It's only going to be available through supplemental insurance or cash paying market. So we're really looking forward to listing in later years and full benefit there. So our focus this year, while we do want patients with CIDP to have the opportunity to benefit from this product, really the vast majority of our sales and efforts will focus on gMG in 2025 and gMG in an IV formulation. To the question about KarXT, I think we are very excited about the commercial opportunity for KarXT in schizophrenia. Of course, as you mentioned, we submitted at the end of last year and are looking forward to an approval and a launch. There are 8 million patients with schizophrenia in China, about 4 million of whom are seeking care in pretty intensive settings, typically using an atypical antipsychotic. And I think we know from the clinical trial experience and certainly what BMS is seeing in the US is that Cobenfy or KarXT provides a really important opportunity to help patients who are not responding well to atypical antipsychotics or who can get more of the negative symptom relief that you can get with Cobenfy versus the atypical antipsychotics. So we're just excited to get the product approved and start to launch. We'll launch with a sales force in about 150-person range focused on these big treatment centers and we're looking forward to that. And I think it's going to be a great product in China. For schizophrenia, Rafael, maybe you can make some comments about Alzheimer's.

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

Thank you.

Thank you. We'll now take the next question from the line of Li Watsek from Cantor Fitzgerald. Please go ahead.

Hey, guys. Thanks for taking our questions. I have one on pipeline and one on commercial. I guess for ZL-1310, DLL3 ADC in terms of durability, where would you place ADC versus the other modalities such as T-cell engagers or radio? And can you talk about chemo sensitivity or radio sensitivity in small cell lung cancer? And then if you align on AE path for second-line, how should we think about the confirmatory study and the enrollment timeline there? And then second, for VYVGART, anything you can share in terms of breakdown of new patient adds versus maintenance for Q4? And then how should we think about the sequential contribution from each group going forward?

Rafael, do you want to start on?

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

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

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

Hi. Thank you for taking my question. I have two questions, one on povetacicept and the other on the catalyst. So for povetacicept, I'm curious if you could share more. I mean you mentioned earlier you'll be joining the global study. But in terms of timeline, what might we be looking at in terms of China launch? And following that, given that there are some products that have been approved or are in the late stage of development, how do we see the kind of relatively later launch in China with like what's our strategy to kind of launch and push povetacicept in China? And kind of what the potential might be especially with consideration of potential label expansion beyond IgAN? So that's kind of the first question on povetacicept. And the second question, just curious if you could help me summarize what are the key top major catalysts that you most expect for the company in this coming year? Thank you.

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

Thanks, Jack. This is Samantha. I'll address our key catalysts in 2025. Since we have a very limited time left, I'll just give you a few very key highlights. First of all, on the pipeline side. On the global, as we talked today in lengthy about our DLL3 assets, ADC assets, we will have data updates for monotherapy in small cell lung cancer at a major conference in the first half this year. We will have data updates for ZL-1310 combo for first-line small cell lung cancer this year. Of course, we also will initiate a pivotal study in small cell lung cancer with the possibility for FDA approval in 2027. We'll initiate a global Phase 1 study in other neuroendocrine cancers in the first half this year. And we also, of course, as we mentioned in our news release, we have other preclinical data updates for at least two additional global assets that are moving into Phase 1 development. Recently, the big news will be bemarituzumab. We will see data readouts and followed by NMPA submission in the first half of 2025. And we also have five regulatory submissions in China this year. And I won't give you the detailed numbers, but bema is a big one, as you know, for first-line gastric cancer. On the BD side, we have additional global and if appropriate regional in-licensing. And of course, if it fits in with our strategy, we will be out-licensing BD deals as well. So overall we are very confident that we are going to achieve profitability in the fourth quarter of 2025. Thank you.

Thank you.

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

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

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