FAST NEWS: Zai Lab’s loss narrows on improved drug sales

The Latest: Biotech company Zai Lab Ltd. (9688.HK; ZLAB.US) reported Wednesday that its loss narrowed 33.7% to $80.3 million in the second quarter of this year.

Looking Up: The company’s net product revenue for the period was approximately $100 million, representing a 45% year-on-year increase, mainly driven by a significant increase in sales of its core products Vyugart and Nuzyra.

Take Note: Its selling, general and administrative expenses increased by 17.4% to $79.7 million, due to growth in general selling expenses used to support Vyugart-focused sales and an increase in related staffs.

Digging Deeper: Zai Lab licenses other companies’ drugs for commercialization in China. But high licensing costs have resulted in greater losses even as revenue has grown in recent years. To reverse that, the company has started to add more self-developed drugs by boosting its R&D staff and conducting more clinical trials to strengthen its independent drug-development capability. The company said in its results report that it is currently preparing for several new products and indications that will be coming to the market, with the aim of achieving profitability by the end of 2025.

Market Reaction: Zai Lab’s Hong Kong shares rose on Wednesday, closing up 7.1% at HK$15.74 by the midday break. It currently trades near the lower end of its 52-week range.

Translation by A. Au

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