QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
Pudong |
||
(Address of principal executive offices) |
(Zip Code) |
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered | ||
The Stock Exchange of Hong Kong Limited |
* |
Included in connection with the registration of the American Depositary Shares with the Securities and Exchange Commission. The ordinary shares are not registered or listed for trading in the United States but are listed for trading on The Stock Exchange of Hong Kong Limited. |
☒ |
Accelerated filer |
☐ | ||||
Non-accelerated filer |
☐ |
Smaller reporting company |
||||
Emerging growth company |
Page |
||||||
PART I. |
1 |
|||||
Item 1. |
1 |
|||||
1 |
||||||
2 |
||||||
3 |
||||||
4 |
||||||
5 |
||||||
6 |
||||||
Item 2. |
18 |
|||||
Item 3. |
30 |
|||||
Item 4. |
31 |
|||||
PART II. |
31 |
|||||
Item 1. |
31 |
|||||
Item 1A. |
31 |
|||||
Item 2. |
36 |
|||||
Item 3. |
36 |
|||||
Item 4. |
36 |
|||||
Item 5. |
36 |
|||||
Item 6. |
37 |
|||||
39 |
As of |
||||||||||||
June 30, 2021 |
December 31, 2020 |
|||||||||||
Notes |
$ |
$ |
||||||||||
Assets |
||||||||||||
Current assets: |
||||||||||||
Cash and cash equivalents |
3 | |||||||||||
Short-term investments |
5 | — | ||||||||||
Accounts receivable (net of allowance of $ December 2020, respectively) 31 , |
||||||||||||
Inventories |
6 | |||||||||||
Prepayments and other current assets |
||||||||||||
Total current assets |
||||||||||||
Restricted cash, non-current |
4 | |||||||||||
Investments in equity investees |
7 | |||||||||||
Prepayments for equipment |
||||||||||||
Property and equipment, net |
8 | |||||||||||
Operating lease right-of-use assets |
||||||||||||
Land use rights, net |
||||||||||||
Intangible assets, net |
||||||||||||
Long term deposits |
||||||||||||
Value added tax recoverable |
||||||||||||
Total assets |
||||||||||||
Liabilities and shareholders’ equity |
||||||||||||
Current liabilities: |
||||||||||||
Accounts payable |
||||||||||||
Current operating lease liabilities |
||||||||||||
Other current liabilities |
11 | |||||||||||
Total current liabilities |
||||||||||||
Deferred income |
||||||||||||
Non-current operating lease liabilities |
||||||||||||
Total liabilities |
||||||||||||
Commitments and contingencies (Note 17 ) |
||||||||||||
Shareholders’ equity |
||||||||||||
Ordinary shares (par value of $ |
||||||||||||
Additional paid-in capital |
||||||||||||
Accumulated deficit |
( |
) | ( |
) | ||||||||
Accumulated other comprehensive loss |
( |
) | ( |
) | ||||||||
Treasury Stock (at cost, |
( |
) | — | |||||||||
Total shareholders’ equity |
||||||||||||
Total liabilities and shareholders’ equity |
||||||||||||
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||||
Notes |
2021 |
2020 |
2021 |
2020 |
||||||||||||||
$ |
$ |
$ |
$ |
|||||||||||||||
Revenue |
9 | |||||||||||||||||
Expenses: |
||||||||||||||||||
Cost of sales |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||
Research and development |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||
Selling, general and administrative |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||||
Loss from operations |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||
Interest income |
||||||||||||||||||
Interest expenses |
— | ( |
) | — | ( |
) | ||||||||||||
Other income (expense), net |
( |
) | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||
Loss before income tax and share of loss from equity method investment |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||
Income tax expense |
10 | — | — | |||||||||||||||
Share of loss from equity method investment |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||||
Net loss |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||||
Net loss attributable to ordinary shareholders |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||||
Loss per share - basic and diluted |
12 | ( |
) | ( |
) | ( |
) | ( |
) | |||||||||
Weighted-average shares used in calculating net loss per ordinary share - basic and diluted |
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
2021 |
2020 |
2021 |
2020 |
|||||||||||||
$ |
$ |
$ |
$ |
|||||||||||||
Net loss |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Other comprehensive (loss) income, net of tax of |
||||||||||||||||
Foreign currency translation adjustments |
( |
) | ( |
) | ( |
) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Comprehensive loss |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
|
|
|
|
|
|
|
|
Ordinary Shares |
Additional paid in capital |
Accumulated deficit |
Accumulated other comprehensive (loss) income |
Treasury Stock |
Total |
|||||||||||||||||||||||||||
Number of Shares |
Amount |
Shares |
Amount |
|||||||||||||||||||||||||||||
$ |
$ |
$ |
$ |
$ |
$ |
|||||||||||||||||||||||||||
Balance at December 31, 2020 |
( |
) | ( |
) | — | — | ||||||||||||||||||||||||||
Issuance of ordinary shares upon vesting of restricted shares |
— | — | — | — | ||||||||||||||||||||||||||||
Exercise of shares option |
— | — | — | — | ||||||||||||||||||||||||||||
Issuance of ordinary shares in connection with collaboration and license arrangement (Note 15) |
— | — | — | — | ||||||||||||||||||||||||||||
Issuance cost adjustment for secondary listing |
— | — | — | — | — | — | ||||||||||||||||||||||||||
Share-based compensation |
— | — | — | — | — | — | ||||||||||||||||||||||||||
Net loss |
— | — | — | ( |
) | — | — | — | ( |
) | ||||||||||||||||||||||
Foreign currency translation |
— | — | — | — | — | — | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Balance at March 31, 2021 |
( |
) | ( |
) | — | — | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Issuance of ordinary shares upon vesting of restricted shares |
— | — | — | — | ||||||||||||||||||||||||||||
Exercise of shares option |
— | — | — | — | ||||||||||||||||||||||||||||
Issuance of ordinary shares upon follow-on public offering, net ofissuance cost of $ |
— | — | — | — | ||||||||||||||||||||||||||||
Receipt of employees’ shares to satisfy tax withholding obligations related to share-based compensation |
— | — | — | — | — | ( |
) | ( |
) | ( |
) | |||||||||||||||||||||
Share-based compensation |
— | — | — | — | — | — | ||||||||||||||||||||||||||
Net loss |
— | — | — | ( |
) | — | — | — | ( |
) | ||||||||||||||||||||||
Foreign currency translation |
— | — | — | — | ( |
) | — | — | ( |
) | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Balance at June 30, 2021 |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Balance at December 31, 2019 |
( |
) | — | — | ||||||||||||||||||||||||||||
Issuance of ordinary shares upon vesting of restricted shares |
— | — | — | — | ||||||||||||||||||||||||||||
Exercise of shares option |
— | — | — | — | ||||||||||||||||||||||||||||
Issuance of ordinary shares upon follow-on public offering, net ofissuance cost of $ |
— | — | — | — | ||||||||||||||||||||||||||||
Share-based compensation |
— | — | — | — | — | — | ||||||||||||||||||||||||||
Net loss |
— | — | — | ( |
) | — | — | — | ( |
) | ||||||||||||||||||||||
Foreign currency translation |
— | — | — | — | — | — | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Balance at March 31, 2020 |
( |
) | — | — | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Issuance of ordinary shares upon vesting of restricted shares |
— | — | — | — | ||||||||||||||||||||||||||||
Exercise of shares option |
— | — | — | — | ||||||||||||||||||||||||||||
Issuance cost for follow-on public offering |
— | — | ( |
) | — | — | — | — | ( |
) | ||||||||||||||||||||||
Share-based compensation |
— | — | — | — | — | — | ||||||||||||||||||||||||||
Net loss |
— | — | — | ( |
) | — | — | — | ( |
) | ||||||||||||||||||||||
Foreign currency translation |
— | — | — | — | ( |
) | — | — | ( |
) | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Balance at June 30, 2020 |
( |
) | — | — | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30, |
||||||||
2021 |
2020 |
|||||||
$ |
$ |
|||||||
Operating activities |
||||||||
Net loss |
( |
) | ( |
) | ||||
Adjustments to reconcile net loss to net cash used in operating activities: |
||||||||
Allowance for doubtful accounts |
||||||||
Inventory write-down |
||||||||
Depreciation and amortization expenses |
||||||||
Amortization of deferred income |
( |
) | ( |
) | ||||
Share-based compensation |
||||||||
Noncash research and development expenses (Note 1 5 ) |
— | |||||||
Share of loss from equity method investment |
||||||||
Loss on disposal of property and equipment |
||||||||
Noncash lease expenses |
||||||||
Changes in operating assets and liabilities: |
||||||||
Accounts receivable |
( |
) | ( |
) | ||||
Inventories |
( |
) | ||||||
Prepayments and other current assets |
( |
) | ( |
) | ||||
Long term deposits |
( |
) | ( |
) | ||||
Value added tax recoverable |
( |
) | ( |
) | ||||
Accounts payable |
||||||||
Other current liabilities |
||||||||
Operating lease liabilities |
( |
) | ( |
) | ||||
Deferred income |
||||||||
|
|
|
|
|||||
Net cash used in operating activities |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Cash flows from investing activities: |
||||||||
Purchases of short-term investments |
— | ( |
) | |||||
Proceeds from maturity of short-term investments |
||||||||
Purchase of property and equipment |
( |
) | ( |
) | ||||
Purchase of intangible assets |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Net cash provided by (used in) investing activities |
( |
) | ||||||
|
|
|
|
|||||
Cash flows from financing activities: |
||||||||
Repayment of short-term borrowings |
— | ( |
) | |||||
Proceeds from exercises of stock options |
||||||||
Proceeds from issuance of ordinary shares upon public offerings |
||||||||
Payment of public offering costs |
( |
) | ( |
) | ||||
Employee taxes paid related to net share settlement of equity awards |
( |
) | — | |||||
|
|
|
|
|||||
Net cash provided by financing activities |
||||||||
|
|
|
|
|||||
Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash |
||||||||
|
|
|
|
|||||
Net increase in cash, cash equivalents and restricted cash |
||||||||
Cash, cash equivalents and restricted cash - beginning of period |
||||||||
|
|
|
|
|||||
Cash, cash equivalents and restricted cash - end of period |
||||||||
|
|
|
|
|||||
Supplemental disclosure on non-cash investing and financing activities: |
||||||||
Payables for purchase of property and equipment |
||||||||
Payables for intangible assets |
— | |||||||
Payables for public offering costs |
— | |||||||
Supplemental disclosure of cash flow information: |
||||||||
Cash and cash equivalents |
||||||||
Restricted cash, non-current |
||||||||
|
|
|
|
|||||
Total cash and cash equivalents and restricted cash |
||||||||
|
|
|
|
|||||
Interest paid |
— |
As of |
||||||||
June 30, 2021 |
December 31, 2020 |
|||||||
$ |
$ |
|||||||
Cash at bank and in hand |
||||||||
Cash equivalents (note (i)) |
||||||||
|
|
|
|
|||||
|
|
|
|
|||||
Denominated in: |
||||||||
US$ |
||||||||
RMB (note (ii)) |
||||||||
Hong Kong dollar (“HK$”) |
||||||||
Australian dollar (“A$”) |
||||||||
Taiwan dollar (“TW$”) |
— | |||||||
|
|
|
|
|||||
|
|
|
|
(i) | Cash equivalents represent short-term and highly liquid investments in a money market fund. |
(ii) | Certain cash and bank balances denominated in RMB were deposited with banks in China. The conversion of these RMB denominated balances into foreign currencies is subject to the rules and regulations of foreign exchange control promulgated by the government of the People’s Republic of China (“PRC”). |
As of |
||||||||
June 30, 2021 |
December 31, 2020 |
|||||||
$ |
$ |
|||||||
Finished goods |
||||||||
Raw materials |
||||||||
Work in process |
||||||||
|
|
|
|
|||||
Inventories |
||||||||
|
|
|
|
As of |
||||||||
June 30, 2021 |
December 31, 2020 |
|||||||
$ |
$ |
|||||||
Office equipment |
||||||||
Electronic equipment |
||||||||
Vehicle |
||||||||
Laboratory equipment |
||||||||
Manufacturing equipment |
||||||||
Leasehold improvements |
||||||||
Construction in progress |
||||||||
|
|
|
|
|||||
Less: accumulated depreciation |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Property and equipment, net |
||||||||
|
|
|
|
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
2021 |
2020 |
2021 |
2020 |
|||||||||||||
$ |
$ |
$ |
$ |
|||||||||||||
Product revenue - gross |
||||||||||||||||
Less: Rebate and sales return |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Product revenue - net |
||||||||||||||||
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
2021 |
2020 |
2021 |
2020 |
|||||||||||||
$ |
$ |
$ |
$ |
|||||||||||||
ZEJULA |
||||||||||||||||
Optune |
||||||||||||||||
QINLOCK |
— | — | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Product revenue - net |
||||||||||||||||
|
|
|
|
|
|
|
|
As of |
||||||||
June 30, 2021 |
December 31, 2020 |
|||||||
$ |
$ |
|||||||
Payroll |
||||||||
Professional service fee |
||||||||
Payables for purchase of property and equipment |
||||||||
Accrued rebate to distributors |
||||||||
Others (note (i)) |
||||||||
|
|
|
|
|||||
Total |
||||||||
|
|
|
|
(i) | Others are mainly payables to employees for exercising the share-based compensations, tax payables and payables related to travel and business entertainment expenses. |
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
2021 |
2020 |
2021 |
2020 |
|||||||||||||
$ |
$ |
$ |
$ |
|||||||||||||
Numerator: |
||||||||||||||||
Net loss attributable to ordinary shareholders |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Denominator: |
||||||||||||||||
Weighted average number of ordinary shares- basic and diluted |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Product revenue - net |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
|
|
|
|
|
|
|
|
As of |
||||||||
June 30, 2021 |
June 30, 2020 |
|||||||
Share options |
||||||||
Non-vested restricted shares |
Company Name |
Relationship with the Group | |
MEDx (Suzhou) Translational Medicine Co., Ltd. |
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
2021 |
2020 |
2021 |
2020 |
|||||||||||||
$ |
$ |
$ |
$ |
|||||||||||||
Selling, general and administrative |
||||||||||||||||
Research and development |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
||||||||||||||||
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
2021 |
2020 |
2021 |
2020 |
|||||||||||||
$ |
$ |
$ |
$ |
|||||||||||||
Selling, general and administrative |
||||||||||||||||
Research and development |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
||||||||||||||||
|
|
|
|
|
|
|
|
• |
C hinese legal agent |
• | L iabilities for non-compliance non-compliance. Order #739 also introduces personal liability on the legal representatives, main responsible persons, directly responsible supervisors or other personnel of MAHs. While Order #680 does not differentiate the liability of local legal agents from the foreign device MAHs, Order #739 makes it clear that local appointees will assume a lesser degree of liability compared to the foreign device MAHs. If local appointees fail to perform the statutory responsibilities and obligations on behalf of the MAHs, they will be subject to administrative fines up to RMB 0.5 million, and their responsible personnel will only be subject to a five-year debarment. In comparison, foreign MAHs who refuse to fulfill the administrative penalties may be subject to a ten-year import ban. |
• | M AH system re-evaluation, establish and implement the product tracing and recall system, and fulfill other statutory obligations imposed by the NMPA. |
• | E ncouraging innovations “first-in-class” |
• | C linical evidence |
• | E xpanded access |
• | expenses incurred for payments to contract research organizations (“CROs”), contract manufacture organizations (“CMOs”), investigators and clinical trial sites that conduct our clinical studies; |
• | employee compensation related expenses, including salaries, benefits and equity compensation expenses; |
• | expenses for licensors; |
• | the cost of acquiring, developing and manufacturing clinical study materials; |
• | facilities, depreciation and other expenses, which include office leases and other overhead expenses; |
• | costs associated with pre-clinical activities and regulatory operations; |
• | expenses associated with the construction and maintenance of our manufacturing facilities; and |
• | costs associated with operating as a public company. |
Three months ended June 30, |
Six months ended June 30, |
|||||||||||||||
2021 |
2020 |
2021 |
2020 |
|||||||||||||
(in thousands, except share and per share data) | ||||||||||||||||
Comprehensive Loss Data: |
||||||||||||||||
Revenue |
$ | 36,935 | $ | 10,995 | $ | 57,038 | $ | 19,213 | ||||||||
Expenses: |
||||||||||||||||
Cost of sales |
(10,868 | ) | (2,896 | ) | (18,373 | ) | (4,980 | ) | ||||||||
Research and development |
(142,224 | ) | (68,307 | ) | (346,076 | ) | (102,049 | ) | ||||||||
Selling, general and administrative |
(54,414 | ) | (23,758 | ) | (90,252 | ) | (42,472 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Loss from operations |
$ | (170,571 | ) | $ | (83,966 | ) | $ | (397,663 | ) | $ | (130,288 | ) | ||||
Interest income |
244 | 1,227 | 458 | 2,882 | ||||||||||||
Interest expenses |
— | (55 | ) | — | (114 | ) | ||||||||||
Other income (expense), net |
7,406 | 2,434 | 1,179 | (691 | ) | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Loss before income tax and share of loss from equity method investment |
$ | (162,921 | ) | $ | (80,360 | ) | $ | (396,026 | ) | $ | (128,211 | ) | ||||
Income tax expense |
— | — | — | — | ||||||||||||
Share of loss from equity method investment |
(403 | ) | (269 | ) | (208 | ) | (406 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Net loss attributable to ordinary shareholders |
$ | (163,324 | ) | $ | (80,629 | ) | $ | (396,234 | ) | $ | (128,617 | ) | ||||
Weighted-average shares used in calculating net loss per ordinary share, basic and diluted |
93,045,531 | 74,738,563 | 90,723,132 | 73,847,551 | ||||||||||||
Net loss per share, basic and diluted |
$ | (1.76 | ) | $ | (1.08 | ) | $ | (4.37 | ) | $ | (1.74 | ) |
Three Months Ended June 30, |
||||||||||||||||
(in thousands) |
2021 |
% |
2020 |
% |
||||||||||||
ZEJULA |
$ | 23,366 | 63.3 | $ | 7,446 | 67.7 | ||||||||||
Optune |
9,535 | 25.8 | 3,549 | 32.3 | ||||||||||||
QINLOCK |
4,034 | 10.9 | — | — | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total product revenue—Net |
$ | 36,935 | 100.0 | $ | 10,995 | 100.0 | ||||||||||
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
||||||||||||||||
(in thousands) |
2021 |
% |
2020 |
% |
||||||||||||
Research and Development Expenses: |
||||||||||||||||
Personnel compensation and related costs |
$ | 17,282 | 12.1 | $ | 11,596 | 17.0 | ||||||||||
Licensing fees |
97,966 | 68.9 | 42,480 | 62.2 | ||||||||||||
Payment to CROs/CMOs/Investigators |
19,618 | 13.8 | 9,982 | 14.6 | ||||||||||||
Other costs |
7,358 | 5.2 | 4,249 | 6.2 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
$ | 142,224 | 100.0 | $ | 68,307 | 100.0 | ||||||||||
|
|
|
|
|
|
|
|
• | $5.7 million for increased personnel compensation and related costs which was primarily attributable to increased employee compensation costs, due to hiring of more personnel during the three months ended June 30, 2021 and the grants of new share options and vesting of restricted shares to certain employees; |
• | $55.5 million for increased licensing fees in connection with the upfront payments for new licensing agreements as well as certain milestone fees; and |
• | $9.6 million for increased payments to CROs, CMOs and investigators in the three months ended June 30, 2021 as we advanced our drug candidate pipeline. |
Three Months Ended June 30, |
||||||||||||||||
(in thousands) |
2021 |
% |
2020 |
% |
||||||||||||
Research and Development Expenses: |
||||||||||||||||
Clinical programs |
$ | 93,433 | 65.7 | $ | 52,003 | 76.1 | ||||||||||
Pre-clinical programs |
28,545 | 20.1 | 2,227 | 3.3 | ||||||||||||
Unallocated research and development expenses |
20,246 | 14.2 | 14,077 | 20.6 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
$ | 142,224 | 100.0 | $ | 68,307 | 100.0 | ||||||||||
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
||||||||||||||||
(in thousands) |
2021 |
% |
2020 |
% |
||||||||||||
Selling, General and Administrative Expenses: |
||||||||||||||||
Personnel compensation and related costs |
30,060 | 55.2 | 14,040 | 59.1 | ||||||||||||
Professional service fees |
4,806 | 8.8 | 2,543 | 10.7 | ||||||||||||
Other costs |
19,548 | 36.0 | 7,175 | 30.2 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
$ | 54,414 | 100.0 | $ | 23,758 | 100.0 | ||||||||||
|
|
|
|
|
|
|
|
• | $16.0 million for increased personnel compensation and related costs which was primarily attributable to increased commercial and administrative personnel costs, due to hiring of more personnel during the three months ended June 30, 2021 and the grants of new share options and vesting of restricted shares to certain employees; |
• | $2.3 million for increased professional service fee, mainly attributable to our increased legal, compliance, accounting and investor and public relations expenses associated with being a public company; and |
• | $12.4 million for increased other costs, mainly including selling, rental, and administrative expenses primary attributable to the commercial operation in Hong Kong and China. |
Six Months Ended June 30, |
||||||||||||||||
(in thousands) |
2021 |
% |
2020 |
% |
||||||||||||
ZEJULA |
$ | 35,972 | 63.1 | $ | 13,791 | 71.8 | ||||||||||
Optune |
16,665 | 29.2 | 5,422 | 28.2 | ||||||||||||
QINLOCK |
4,401 | 7.7 | — | — | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total product revenue—Net |
$ | 57,038 | 100.0 | $ | 19,213 | 100.0 | ||||||||||
|
|
|
|
|
|
|
|
Six Months Ended June 30, |
||||||||||||||||
(in thousands) |
2021 |
% |
2020 |
% |
||||||||||||
Research and Development Expenses: |
||||||||||||||||
Personnel compensation and related costs |
$ | 29,979 | 8.7 | $ | 21,600 | 21.2 | ||||||||||
Licensing fees |
269,248 | 77.8 | 51,720 | 50.7 | ||||||||||||
Payment to CROs/CMOs/Investigators |
35,144 | 10.1 | 19,812 | 19.4 | ||||||||||||
Other costs |
11,705 | 3.4 | 8,917 | 8.7 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
$ | 346,076 | 100.0 | $ | 102,049 | 100.0 | ||||||||||
|
|
|
|
|
|
|
|
• | $8.4 million for increased personnel compensation and related costs which was primarily attributable to increased employee compensation costs, due to hiring of more personnel during the six months ended June 30, 2021 and the grants of new share options and vesting of restricted shares to certain employees; |
• | $217.5 million for increased licensing fees in connection with the upfront payments for new licensing agreements as well as certain milestone fees; and |
• | $15.3 million for increased payment to CROs, CMOs and investigators in the six months ended June 30, 2021 as we advanced our drug candidate pipeline. |
Six Months Ended June 30, |
||||||||||||||||
(in thousands) |
2021 |
% |
2020 |
% |
||||||||||||
Research and Development Expenses: |
||||||||||||||||
Clinical programs |
$ | 279,689 | 80.8 | $ | 72,335 | 70.9 | ||||||||||
Pre-clinical programs |
31,045 | 9.0 | 2,915 | 2.9 | ||||||||||||
Unallocated research and development expenses |
35,342 | 10.2 | 26,799 | 26.2 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
$ | 346,076 | 100.0 | $ | 102,049 | 100.0 | ||||||||||
|
|
|
|
|
|
|
|
Six Months Ended June 30, |
||||||||||||||||
(in thousands) |
2021 |
% |
2020 |
% |
||||||||||||
Selling, General and Administrative Expenses: |
||||||||||||||||
Personnel compensation and related costs |
$ | 53,472 | 59.2 | $ | 27,082 | 63.8 | ||||||||||
Professional service fees |
8,389 | 9.3 | 4,570 | 10.7 | ||||||||||||
Other costs |
28,391 | 31.5 | 10,820 | 25.5 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
$ | 90,252 | 100.0 | $ | 42,472 | 100.0 | ||||||||||
|
|
|
|
|
|
|
|
• | $26.4 million for increased personnel compensation and related costs which was primarily attributable to increased commercial and administrative personnel costs, due to hiring of more personnel during the six months ended June 30, 2021 and the grants of new share options and vesting of restricted shares to certain employees; |
• | $3.8 million for increased professional service fee, mainly attributable to our increased legal, compliance, accounting and investor and public relations expenses associated with being a public company; and |
• | $17.6 million for increased other costs, mainly including selling, rental, and administrative expenses primary attributable to the commercial operation in Hong Kong and China. |
Six months ended June 30, |
||||||||
(in thousands) |
2021 |
2020 |
||||||
Net cash used in operating activities |
$ | (235,348 | ) | $ | (92,319 | ) | ||
Net cash provided by (used in) investing activities |
737,828 | (6,521 | ) | |||||
Net cash provided by financing activities |
820,949 | 281,500 | ||||||
Effect of foreign exchange rate changes |
1,028 | 12 | ||||||
|
|
|
|
|||||
Net increases in cash, cash equivalents and restricted cash |
$ | 1,324,457 | $ | 182,672 | ||||
|
|
|
|
(in thousands) |
Total |
Less than 1 year |
1 to 3 years |
3 to 5 years |
More than 5 years |
|||||||||||||||
Purchase Obligations |
$ | 28,240 | $ | 28,191 | $ | 49 | — | — | ||||||||||||
Operating Lease Obligations |
$ | 18,847 | $ | 6,557 | $ | 6,180 | $ | 4,373 | $ | 1,737 |
• | our ability to successfully commercialize ZEJULA, Optune, QINLOCK and any other products and product candidates that we may obtain regulatory approval for; |
• | the anticipated amount, timing and accounting of revenues; contingent, milestone, royalty and other payments under licensing, collaboration, and acquisition agreements; tax positions and contingencies; collectability of receivables; pre-approval inventory; cost of sales; research and development costs; compensation and other selling, general and administrative expenses; amortization of intangible assets; foreign currency exchange risk; estimated fair value of assets and liabilities; and impairment assessments; |
• | expectations, plans and prospects relating to sales, pricing, growth and launch of our marketed and pipeline products; |
• | the potential impact of increased product competition in the markets in which we compete, including increased competition from new originator therapies, generics, prodrugs and biosimilars of existing products and products approved under abbreviated regulatory pathways, including generic or biosimilar versions of our products; |
• | patent terms, patent term extensions, patent office actions and expected availability and any period of regulatory exclusivity; |
• | the timing, outcome and impact of administrative, regulatory, legal or other proceedings related to our patents and other proprietary and intellectual property rights, tax audits, assessments and settlements, pricing matters, sales and promotional practices, product liability and other matters; |
• | the drivers for growing our business, including our plans and intention to commit resources relating to discovery, research and development programs and business development opportunities as well as the potential benefits and results of certain business development transactions; |
• | our ability to finance our operations and business initiatives and obtain funding for such activities; |
• | the expectations, development plans and anticipated timelines, including costs and timing of potential clinical trials, filings and approvals of our products, product candidates and pipeline programs, including collaborations with third-parties, as well as the potential therapeutic scope of the development and commercialization of our and our collaborators’ pipeline products; |
• | reputational or financial harm to our business arising from adverse safety events, including product liability claims or lawsuits affecting our or any of our licensors’ marketed products, generic or biosimilar versions of our or any of our licensors’ marketed products or any other products from the same class as one of our or any of our licensors’ products; |
• | unexpected impacts on our business operations including sales, expenses, supply chain, manufacturing, cyber-attacks or other privacy or data security incidents, research and development costs, clinical trials and employees; |
• | the potential impact of measures being taken worldwide designed to reduce healthcare costs and limit the overall level of government expenditures, including the impact of pricing actions and reduced reimbursement for our products; |
• | our manufacturing capacity, use of third-party contract manufacturing organizations, plans and timing relating to changes in our manufacturing capabilities or activities in new or existing manufacturing facilities; |
• | lease commitments, purchase obligations and the timing and satisfaction of other contractual obligations; |
• | the impact of new laws, regulatory requirements, judicial decisions and accounting standards; |
• | the disruption of our business relationships with our licensors; |
• | the direct and indirect impact of the COVID-19 pandemic on our business and operations, our and our partners’ ability to effectively travel, as needed, during the COVID-19 pandemic, and the duration and impact of COVID-19 or any of its variants that may affect, precipitate or exacerbate one or more of any of the risks and uncertainties mentioned in this section; |
• | our ability to effectively manage our growth; |
• | the disruption in the capital or credit markets which may adversely impact our ability to obtain necessary capital or credit market financing; |
• | the geopolitical tensions that exist between China and the United States may adversely affect our business, our ability to grow, and our access to necessary capital or credit markets; |
• | our ability to retain key executives and to attract, retain and motivate personnel; and |
• | other risks and uncertainties, including those listed under “Part I—Item 1A—Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2020. |
Exhibit Number |
Exhibit Title | |
101.SCH* | Inline XBRL Taxonomy Extension Schema Document | |
101.CAL* | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |
101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | |
101.PRE* | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |
101.DEF* | Inline XBRL Taxonomy Extension Definitions Linkbase Document | |
104* | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
* | Filed herewith |
** | Furnished herewith |
^ | Certain confidential information contained in this exhibit has been omitted because it (i) is not material and (ii) would be competitively harmful if publicly disclosed. |
ZAI LAB LIMITED | ||||||
Dated: August 9, 2021 | By: | /s/ Samantha Du | ||||
Name: | Samantha Du | |||||
Title: | Chief Executive Officer |