Hello, ladies and gentlemen. Thank you for standing by and welcome to Xilab First Quarter 2026 Financial Results Conference Call. At this time, our participants are in listen-only mode. Later, we will 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 Cho, Senior Vice President of Invest Relations. Please go ahead, Madam.

Thank you, operator. Hello and welcome, everyone. Today's earnings call will be led by Dr. Samantha Du, Xilabs founder, CEO, and chairperson. She'll be joined by Josh Smiley, president and chief operating officer, Dr. Rafael Amato, president and head of global research and development, and Dr. Yajing Chen, chief financial officer. Dr. Shanhe, 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 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 May 7, 2026, 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. ZaiLive is a pivotal moment. With our funding, we have built a fully integrated R&D engine, capable of taking assets from discovery through global registrational studies, with the ability to design and execute multiple center trials globally. The impact of this investment is beginning to emerge. Our pipeline is expanding. Our global assets are generating meaningful data, and our lead asset is in global pivotal stage. We are also leveraging AI and data-driven approaches across the organization. to enhance speed, precision, and efficiency, strengthening overall execution and corporate productivity, which we expect will drive further results. Last month, at AACR, we presented new data for Zouci that reinforced our conviction, including strong efficacy both systemically and in the brain in patients with small-cell lung cancer, alongside a best-in-class safety profile. We also announced global collaborations with Amgene and Borenger-Ingerhand to explore ZOSI as a potential backbone therapy in small-cell lung cancer and neuroendocrine carcinomas, two cancer types with significant amount of medical need. In late 2027, we expect to submit our first global BLA to the FDA, a defining milestone that marks our successful transformation to a global biotech company. Beyond doses, we are building a growing portfolio of global clinical programs, including ZL1503 for atopic dermatitis, now in a Phase I-1b study. This reflects the strength of our R&D engine, which combines rigorous science with operational speed and efficiency to advance differentiated assets into global development. Our RISB business remains commercially profitable with a strong balance sheet. We are focused on strengthening our commercial capabilities and execution, and I am pleased to welcome Dr. Izo Wang, as an operating partner, to work with me to drive commercial performance and readiness ahead of upcoming launches. The recent policy developments in the region, including the State Council derivative, signal meaningful government support for innovative medicines, and we believe Sialife is well positioned to benefit over the medium to long term. Given our first and best-in-class portfolio, we are confident in Xi's future, which will be defined by our growing global and regional pipeline of differentiated assets. With that, I'll now turn the call over to Rafael.

Thank you, Samantha. Over the past years, we have built a globally integrated R&D engine that spans from discovery through global registrational development, while also delivering on regional development across therapy areas. Our ability to design and execute high-quality global studies with speed and discipline is a core strength that positions us well for development across regulatory geographies. We are embedding AI in R&D, including drug discovery and clinical trial design, to enhance the quality of our decisions and to more efficiently advance our pipeline. The data we presented at AACR last month highlights the output of this engine across our global pipeline that included both externally sourced and internally discovered products. Let me start with Zosie. In extensive-stage small cell lung cancer, at the go-forward dose of 1.6 mg per kg, Josie demonstrated a confirmed intracranial overall response rate of 62.5 percent and a best overall intracranial response rate approaching 69 percent, including four complete responses. Grade 3 or higher treatment-related adverse events were approximately 16 percent. Responses of this magnitude inside the brain in one of the most treatment-resistant tumor types in oncology are meaningful signals of differentiation. The safety data reinforced what we have consistently observed. This is a best-in-class profile. A Registrational Phase III DELEBATE study is enrolling well and is on track to complete enrollment in the first half of 2027, positioning us for an interim analysis and potential accelerated approval submission next year. In extrapulmonary neuroendocrine carcinoma, a setting where there is no established standard care in the second line and beyond, SOCI demonstrated a confirmed ORR of 38.2 percent. This compares favorably to currently used regimens, which typically show response rates of approximately 18 percent with limited durability. We're actively engaging with regulators on a potential registrational path and are well on our way recruiting into an extension single-arm study. Depending on the outcomes of regulatory discussions, we could initiate a registrational or confirmatory study by year-end. Now on the collaborations with Amgen and Boring and Ingoheim, exploring ZOSI in combination with T-cell engagers. The scientific rationale is straightforward. ZOSI delivers rapid tumor debulking through targeted cytotoxicity, while T-cell engagers drive antigen-dependent immune-mediated healing. The mechanisms are complementary. The toxicity profiles are expected to have limited overlap, and together, they have the potential to deepen and extend responses in ways neither mechanistic approach achieves alone. A Phase I with Amgen, which includes a cohort of untreated patients with triple combination of ZOZI, IMDELTRA, and IMFINZI, is already enrolling, and the BI study is expected to follow in the coming months. We're also evaluating ZOZI in combination with PD-L1 with or without chemotherapy in phase 1 study in first-line small cell lung cancer, with data expected later this year. A chemosparing approach may allow for extended treatment duration compared to chemotherapy alone, where patients typically discontinue after four cycles. This is the basis of our phase 3 strategy with IO, which we are actively discussing with regulators. Beyond SOSI, our global oncology pipeline continues to advance. ZL6201, our LRC15ADC, is already in the clinic. ZL1311, our wholly-owned MAC17 targeting T-cell engager, is expected to enter the clinic by year end. We will provide updates as data matures. On the regional oncology site, we submitted a marketing authorization application for tumor-treating fields in locally advanced pancreatic cancer and expect an approval for this indication by year end, and for tip-back for cervical cancer in the coming months. Turning to immunology, we recently presented preclinical data for ZL1503, our IL-13, IL-31 receptor alpha-by-specific at Immunology 2026. The data show rapid and durable inhibition of both IL-13-driven inflammation and IL-31-mediated parietals across disease models in non-human primates with sustained effects following single dose. We believe this data supports the potential for differentiated efficacy, less frequent dosing, and broad application across multiple atopic diseases, including asthma, rhinitis, and conjunctivitis. Initial phase one data in healthy volunteers and atopic dermatitis patients are expected in the second half of this year. Finally, in our regional immunology portfolio, our partner Vertex reported positive phase three interim results from the Rainier study of covitacicep in IgA nephropathy, achieving approximately a 50% reduction in proteinuria versus placebo, and meeting both the primary and all secondary endpoints. I want to close with a broader point. The progress I've described today reflects a pipeline strategy built on biological rationale, clinical differentiation, and execution, and an organization that now has the infrastructure to advance multiple programs simultaneously at speed and across geographies we have significant data emerging throughout the year and i look forward to providing those updates and with that

i'll hand it over to josh thank you rafael and hello everyone let me start with our first quarter performance which reflected chinese new year seasonality as well as near-term product specific dynamics starting with the juula performance in the quarter was impacted by a shift in hospital utilization patterns following volume-based procurement for generic alaparib and some incremental competitive pressure in the PARP inhibitor class. Our first-line positioning remains intact, supported by our label advantage, and we are working hard on stabilizing and driving demand. On VivGart, physician confidence remains strong and our share within Biologics is stable. We deliver double-digit volume growth year-on-year in the quarter, offset by a 12 price discount related to nrdl renewal on a full year basis we expect a similar level of volume growth as we continue to shape gmg treatment dynamics the long-term opportunity stays significant biologic penetration in the gmg maintenance setting remains around 15 suggesting a runway for growth plus upcoming phase 3 readouts in new indications such as iim and and Sorgren's add potential upside. For Zacdoro, patient demand was strong and hospital adoption continued to expand. Performance was constrained by supply, and we expect those constraints may persist through the remainder of the year. That said, the underlying demand is encouraging and local manufacturing expected in 2027 should alleviate supply pressure and support meaningful growth and margin expansion over time. Looking ahead, we see a strong set of commercial catalysts. CAR-XT launches in the second quarter and represents the first novel mechanism for schizophrenia in decades, a significant moment for the approximately 8 million patients living with this disease in China. CAR-XT's inclusion and national treatment guidelines ahead of launch reflect strong clinical confidence in this therapy. Our focus this year is on physician education and market development, building a strong foundation for the brand. We also anticipate potential regulatory approval for TivDac this year and intend to leverage our existing Zajula infrastructure to drive commercial synergies and accelerate uptake. More broadly, our late-stage pipeline provides multiple additional growth opportunities in the region. Recent positive Phase III readouts for POVA-Tesicept in IGAN and Allegra-BART in thyroid eye disease add further depth to our long-term growth profile, and we see both as meaningful future contributors. Lastly, we are applying AI to sharpen commercial execution, from physician targeting and field force optimization to real-time competitive insights, enabling more agile and informed go-to-market decisions. 2026 is about execution, delivering on key launches, stabilizing the portfolio, and building momentum. And with that, I will now pass the call over to Yajing to take us through our financial results. Yajing?

Yajing? Thank you, Josh. Our quarter one results reflect the near-term dynamics just described. First quarter total product revenue declined 6% year-over-year to $99.6 million, driven by lower Vajula sales, partially offset by continued growth from Zagdura and New Zyla. While we expect total product revenue to improve sequentially over the next nine months as underlying demand continues to build. We anticipate near-term pressure for 2026 four-year total product revenues with a return to growth in 2027. Turning now to our expenses, our commitment to financial discipline is reflected in continued execution against our R&D and commercial priorities. And we will expand AI utilization from process automation to agentate execution to further improve cost efficiencies. R&D expenses for the first quarter increased 8% year-over-year, driven by increased license fees and clinical trial-related expenses partially offset by lower personnel compensation expenses due to resource prioritization and efficiency efforts. HGMA expenses increased slightly year-over-year, mainly due to higher general selling expenses. As a result, large fund operations increased by 23% for the quarter to $69.4 million. We ended the quarter with a cash position of $761.3 million. Our regional business is commercially profitable. Our global pipeline continues to progress steadily. Our focus this year remains on strengthening the regional business, executing cross-global pipelines, and deploying capital thoughtfully to support both near-term launches and long-term growth drivers. With a strong balance sheet, we are well-positioned to execute against these priorities. Operator, please open up the line for questions.

Thank you, dear participants. As a reminder, if you wish to ask a question, please press star 1-1 on your telephone keypad and wait for your name to be announced. To withdraw a question, please press star 1-1 again. Listen, Bob will compile the Q&A queue. This will take a few moments. And now we're going to take the first question. Just give us a moment. And the question comes to the line of Johnson Chang from Leering Partners. Your line is open. Please ask your question.

Hey guys, thanks for taking my questions. First question, on these OC collaborations, evaluating the combinations with DLL3 TESOL engagers, how do these facilitate your longer-term strategy, and are there other combinations and collaborations that make sense to explore? And then second question, on the commercial business in China, can give us a sense for how to think about revenues over the course of the year. Thank you.

Hey, good morning, Jonathan. It's Josh. Thank you. I'll ask Rafael to take the first one, and then Yajin can take the second.

Yes. Thanks for the question. This combination, I spoke about the rationale of it during the prepare remarks, and the expectation is that we would get better efficacy in terms of responses durability, and eventually better survival done with each agent alone. We're testing it in second line in tarlatamab-naive patients, tarlatamab-experienced patients, but importantly also in first line. Our first line study will not include tarlatamab at the pivotal trial to begin with until we get more data. But if the data are positive, we may consider, you know, progressing this and developing it as a, you know, best-in-class regimen. So, it's really improving the baseline treatment of this disease with two really very active mechanisms.

Thanks, Rafael. Yajing?

Yes. Hi, Jonathan. Thanks for the question. As I mentioned before, our revenue in the next nine months, you're going to expect to see some sequential growth. But for the four-year revenue, we are going to continue to experience some short-term pressure. So we are seeing the return to growth in 2027.

Thanks, Sheijing. Next question, Albert? Thank you.

Yes, of course. Now we're going to take our next question. And the next question comes line of Michael Yi from UBS. Your line is open. Please ask your question.

Hey, guys. Thanks for taking our questions. This is Kyle Yang for Michael Yi from UBS. Two for us. So the first question is, for your upcoming data readout for IELTS 13 and 31, what is the expectation for data, and how do you expect the data set in healthy volunteers to de-risk the asset? And when do we expect data from moderate to severe atopic dermatitis patients? The second question is that for your data set in frontline small cell lung cancer in the second half, what is the expectation for that? And also, what's good data? How do you pick the Go4 regimen in terms of double it versus cripple it? Thank you.

Thanks, Kyle. Go ahead, Rafael.

Yeah, so with the first question in terms of expectations for 1503, the healthy volunteers data I think is going to be very useful. We actually have progressed the study quickly with those cohorts, and we would be looking safety obviously pharmacokinetics you know to evaluate dosing interval which we expect to to be you know prolonged dosing pharmacodynamics such as phosphostat and others and anti-drug antibodies so all of these i think will inform you know the basic parameters that will allow us to you know continue the development of the product and with regards to what to expect obviously it depends on how much data we have on atopic dermatitis but we should have data on healthy volunteers by the end of the year and at least some of the cohorts with atopic dermatitis so our expectation is that we may publish this data before the end of the year And then with regards to first line, the question was, what do we consider, you know, as go forward? Well, you know that the chemotherapy plus checkpoint inhibitor, which would be the control of our study, has a PFS of about five months or so. So our response rate in cycle 9 with 1.6 milligrams per kilogram is in the order of 68%. So obviously, there's still room for improvement there. So we will be looking for higher response rates and also longer PFS than that that we believe is clinically significant. And we plan to present this data towards the fall or so. And by then, we should have sufficient follow-up to really be able to evaluate that. But we're currently planning to proceed with this study before the end of the year and in discussions with regulators.

Thank you. Now we're going to take our next question. And it comes to the line of Anupam Rama from JPMorgan. Your line is open. Please ask your question.

Hey, guys. Thanks so much for taking the question. Just with the recent positive data for Povitachyceps and IGAN, what are the plans to submit in in regional China and just remind us is there going to be any bridging work required thanks so much thanks Anna Palm okay Raphael yeah we were very

pleased to see the results of the Rainier study you know there's really a good advance for for eigen you know the filing of our partner you know has taken place and we will discuss with CDE what you know the the regulatory requirements for filing but we expect that we would be able to proceed because we did include patients from China in this study and bridging study is not expected to be required so you know as our partner we would discuss with CDE our approach to an accelerated approval with this product. Great, thanks so much for

taking our question. Thank you. Now we're going to take our next question and the question comes line of Lee Wadsack from Kantor. Your line is open, please ask your question.

Good morning, this is Vin on Lee. So question about ZL1503, the bi-specific antibody. So it seems like data is gonna come in the second half of this year but so there's a lot of biospecific antibody out there in AD so we'd like to know what's your base assumption on the market differentiation for this drug and the and And also your development strategy there. Are you planning to run a phase to trial or are you potentially going to run these out? Thank you.

Raphael, why don't you address that and I can make a couple of commercial comments.

Sure. Yeah, in terms of differentiation, as I mentioned, I think long-term dosing is important and we still have to evaluate how often that would be, but we expect that that would be the case for 1503. And in terms of activity, you know, key activity is obviously decreasing pruritus because our product inhibits the IL-31 receptor. And so we expect, using the numeric rating scale, that we would have a meaningful decrease in pruritus that's also occurring early on in the treatment, because I think that's really important and differentiating from other products. The same for skin pain, which is, you know, something that affects the quality of life of patients. And of course, the main endpoint, which tends to be EC75, which you know what the benchmark out there is, you know, in the 40% range. So, you know, surpassing these numbers, you know, would be together with the extended dosing, something that we would consider, you know, very positive for us to move forward with phase two. And as of the question of whether or no, we plan to do that, the answer is yes, we plan to do our phase two study and evaluate these parameters, as I mentioned before.

Thank you. Yeah, and I think just a comment is, Josh. Obviously, it's a competitive class, but there's lots of room for differentiation, still very undertreated. So I think, as Rafael said, what we know about patients is dose inconvenience makes a difference. relief on itch and speed of onset are all important things, things that will, you know, elucidate over the course of the clinical development program. So we're quite excited about the opportunity here.

Thank you.

Thank you. Dear participants, as a reminder, if you wish to ask a question, please press star 1-1 on your telephone keypad and wait for your name to be announced. To withdraw your question, please press star 1-1 again. And now we're going to take our next question. And the question comes to the line of G.E. Chen from Goldman Sachs. Please ask your question. Your line is open.

Great. Thank you for taking my questions. I got two questions. The first one is on ZO-C. We noticed that Amgen has initiated Phase I study for telotomab plus ZO-C within and without PD-L1 in small cell lung cancer. So could you share a bit more about your thoughts on potential dose levels? you're going to explore, particularly considering for telolimab, FDA actually has a black box in their label, and what are the potential of those levels you're going to be exploring for ZOZI and also for telolimab. And also, have you considered to test a sequential use of those two drugs, or instead you're going to be more focusing on administrating those two drugs together to patients. And my second question is regarding the FGAR-TISMOD in China. Could you please comment on the evolving landscape, given that now Ramagen's teletastrocept has been also enrolled into NRDL, particularly in the first quarter? Have you seen any of the change to the market dynamics?

Thank you. Thanks. Rafael, do you want to start on Zosie, and then I'll comment on VivGuard?

Sure. Thanks for the question. Yeah, the study is actually enrolling now. In terms of the dose levels, we wanted to have a Q3 weekly regimen with both drugs. And the dose of Tarlatama will be fixed, and we will do, you know, hopefully a rapid dose escalation with ZOZI up to 1.6 mixture kit, which is the go-to dosing that we have for DELAVATE, our Phase III study in second line. So, you know, as I mentioned before, this will be in various clinical settings, including the triplet combination with checkpoint inhibitors, as you mentioned, in frontline and three of patients. So, in terms of whether it's sequential versus together, there's, you know, given the mechanism of action, you know, we want the rapid debulking to be present when the diesel engager is given. So they're given in fast sequence. We're not going to test, you know, alternating sequences or other schedules. So I hope that that helps. Thanks for the question.

Thanks, Rafael. And on BibGart, first, as we mentioned, we're seeing, you know, double-digit volume increases in Q1 as a function both of new patients continuing to come in and get started and extending duration of therapy. That being said, there's still only about 15% of patients that would qualify for a biologic therapy in GMG are getting it. So I think having, you know, additional competition is fine. We don't really see an impact from tele to any measurable degree in Q1. And again, we would expect as we get through the year that continuing to emphasize getting patients with GMG on to biologic therapy and getting them the benefits of longer-term maintenance is going to help everybody. So, that's what we're focused on. Thanks.

Thank you.

Thank you. Dear participants, as a final reminder, if you would like to ask a question, please press star 1-1. Dear speakers, in order for the questions for today, I would now like to hand the conference over to your speaker Samantha do for any

closing remarks Samantha please go ahead thank you operator I want to thank everyone for taking the time to join us on a call today we appreciate your support and look forward to updating you again after the second quarter of 2026 operator you may not disconnect this call thank you this concludes this

conference call thank you for participating manual or disconnect have a nice day