☒ | 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 |
Cayman Islands | 98-1144595 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
4560 Jinke Road Bldg. 1, Fourth Floor Pudong Shanghai, China | 201210 | ||
(Address of principal executive offices) | (Zip Code) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
American Depositary Shares, each representing 1 Ordinary Share, par value $0.00006 per share | ZLAB | The Nasdaq Global Market | ||
Ordinary Shares, par value $0.00006 per share* | 9688 | 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. |
Large accelerated filer | ☒ | Accelerated filer | ☐ | |||||
Non-accelerated filer | ☐ | Smaller reporting company | ☐ | |||||
Emerging growth company | ☐ |
Page | ||||||
PART I. | ||||||
4 | ||||||
Item 1. | Financial Statements (Unaudited) | |||||
5 | ||||||
6 | ||||||
7 | ||||||
8 | ||||||
9 | ||||||
10 | ||||||
Item 2. | ||||||
Item 3. | Quantitative and Qualitative Disclosures about Market Risk | 41 | ||||
Item 4. | Controls and Procedures | 42 | ||||
42 | ||||||
Item 1. | Legal Proceedings | |||||
Item 1A. | ||||||
53 | ||||||
Item 3. | Defaults upon Senior Securities | 53 | ||||
Item 4. | Mine Safety Disclosures | 53 | ||||
Item 5. | Other Information | 53 | ||||
Item 6. | Exhibits | 54 | ||||
As of | ||||||||||||||||||||||||
As of | Notes | September 30, 2021 | December 31, 2020 | |||||||||||||||||||||
March 31, 2021 | December 31, 2020 | |||||||||||||||||||||||
Notes | $ | $ | $ | $ | ||||||||||||||||||||
Assets | ||||||||||||||||||||||||
Current assets: | ||||||||||||||||||||||||
Cash and cash equivalents | 3 | 1,013,420 | 442,116 | 3 | 1,398,498 | 442,116 | ||||||||||||||||||
Short-term investments | 5 | — | 744,676 | 5 | 170,000 | 744,676 | ||||||||||||||||||
Accounts receivable (net of allowance of $2 and $1 as of March 31, 2021 and 2020, respectively) | 8,815 | 5,165 | ||||||||||||||||||||||
Accounts receivable (net of allowance for credit loss of $6 and $1 as of September 30, 2021 and December 31, 2020, respectively) | 21,018 | 5,165 | ||||||||||||||||||||||
Inventories | 6 | 12,629 | 13,144 | 6 | 12,494 | 13,144 | ||||||||||||||||||
Prepayments and other current assets | 14,321 | 10,935 | 17,077 | 10,935 | ||||||||||||||||||||
Total current assets | 1,049,185 | 1,216,036 | 1,619,087 | 1,216,036 | ||||||||||||||||||||
Restricted cash, non-current | 4 | 743 | 743 | 4 | 743 | 743 | ||||||||||||||||||
Investments in equity investees | 7 | 1,473 | 1,279 | |||||||||||||||||||||
Long - term investments | 7 | 20,801 | 1,279 | |||||||||||||||||||||
Prepayments for equipment | 244 | 274 | 1,129 | 274 | ||||||||||||||||||||
Property and equipment, net | 8 | 29,016 | 29,162 | 8 | 37,087 | 29,162 | ||||||||||||||||||
Operating lease right-of-use | 16,652 | 17,701 | 15,514 | 17,701 | ||||||||||||||||||||
Land use rights, net | 7,784 | 7,908 | 7,749 | 7,908 | ||||||||||||||||||||
Intangible assets, net | 1,585 | 1,532 | 1,678 | 1,532 | ||||||||||||||||||||
Long term deposits | 910 | 862 | ||||||||||||||||||||||
Long-term deposits | 901 | 862 | ||||||||||||||||||||||
Value added tax recoverable | 23,698 | 22,141 | 23,390 | 22,141 | ||||||||||||||||||||
Total assets | 1,131,290 | 1,297,638 | 1,728,079 | 1,297,638 | ||||||||||||||||||||
Liabilities and shareholders’ equity | ||||||||||||||||||||||||
Current liabilities: | ||||||||||||||||||||||||
Accounts payable | 41,415 | 62,641 | 51,406 | 62,641 | ||||||||||||||||||||
Current operating lease liabilities | 5,602 | 5,206 | 6,312 | 5,206 | ||||||||||||||||||||
Other current liabilities | 11 | 45,639 | 30,196 | 11 | 54,292 | 30,196 | ||||||||||||||||||
Total current liabilities | 92,656 | 98,043 | 112,010 | 98,043 | ||||||||||||||||||||
Deferred income | 16,657 | 16,858 | 17,487 | 16,858 | ||||||||||||||||||||
Non-current operating lease liabilities | 12,307 | 13,392 | 10,652 | 13,392 | ||||||||||||||||||||
Total liabilities | 121,620 | 128,293 | 140,149 | 128,293 | ||||||||||||||||||||
Commitments and contingencies (Note 18) | 0 | 0 | ||||||||||||||||||||||
Commitments and contingencies (Note 17) | 0 | 0 | ||||||||||||||||||||||
Shareholders’ equity | ||||||||||||||||||||||||
Ordinary shares (par value of $0.00006 per share; 500,000,000 shares authorized, 88,519,172 and 74,666,725 shares issued and outstanding as of March 31, 2021 and 2020, respectively) | 5 | 5 | ||||||||||||||||||||||
Ordinary shares (par value of $0.00006 per share; 500,000,000 shares authorized, 95,273,589 and 87,811,026 shares issued and outstanding as of September 30, | 6 | 5 | ||||||||||||||||||||||
Additional paid-in capital | 1,967,802 | 1,897,467 | 2,812,830 | 1,897,467 | ||||||||||||||||||||
Accumulated deficit | (946,513 | ) | (713,603 | ) | (1,206,249 | ) | (713,603 | ) | ||||||||||||||||
Accumulated other comprehensive loss | 15 | (11,624 | ) | (14,524 | ) | (15,124 | ) | (14,524 | ) | |||||||||||||||
Treasury Stock (at cost, 27,722 and 0nil shares as of September 30, 2021 and December 31, 2020, respectively) | (3,533 | ) | — | |||||||||||||||||||||
Total shareholders’ equity | 1,009,670 | 1,169,345 | 1,587,930 | 1,169,345 | ||||||||||||||||||||
Total liabilities and shareholders’ equity | 1,131,290 | 1,297,638 | 1,728,079 | 1,297,638 | ||||||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||
Three Months Ended March 31, | Notes | 2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||||||||
2021 | 2020 | ||||||||||||||||||||||||||||||
Notes | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||
Revenue | 9 | 20,103 | 8,218 | 9 | 43,103 | 14,651 | �� | 100,141 | 33,864 | ||||||||||||||||||||||
Expenses: | |||||||||||||||||||||||||||||||
Cost of sales | (7,505 | ) | (2,084 | ) | (12,162 | ) | (4,934 | ) | (30,535 | ) | (9,914 | ) | |||||||||||||||||||
Research and development | (203,852 | ) | (33,742 | ) | (55,144 | ) | (58,100 | ) | (401,220 | ) | (160,149 | ) | |||||||||||||||||||
Selling, general and administrative | (35,838 | ) | (18,714 | ) | (59,002 | ) | (27,874 | ) | (149,254 | ) | (70,346 | ) | |||||||||||||||||||
Loss from operations | (227,092 | ) | (46,322 | ) | (83,205 | ) | (76,257 | ) | (480,868 | ) | (206,545 | ) | |||||||||||||||||||
Interest income | 214 | 1,655 | 713 | 866 | 1,171 | 3,748 | |||||||||||||||||||||||||
Interest expenses | — | (59 | ) | — | (43 | ) | — | (157 | ) | ||||||||||||||||||||||
Other expense net, | (6,227 | ) | (3,125 | ) | |||||||||||||||||||||||||||
Other (expense s ) income, net | (13,580 | ) | 11,958 | (12,401 | ) | 11,267 | |||||||||||||||||||||||||
Loss before income tax and share of gain (loss) from equity method investment | (233,105 | ) | (47,851 | ) | |||||||||||||||||||||||||||
Loss before income tax and share of loss from equity method investment | (96,072 | ) | (63,476 | ) | (492,098 | ) | (191,687 | ) | |||||||||||||||||||||||
Income tax expense | 10 | 0— | — | 10 | 0— | — | 0— | — | |||||||||||||||||||||||
Share of gain (loss) from equity method investment | 195 | (137 | ) | ||||||||||||||||||||||||||||
Share of loss from equity method investment | (340 | ) | (265 | ) | (548 | ) | (671 | ) | |||||||||||||||||||||||
Net loss | (232,910 | ) | (47,988 | ) | (96,412 | ) | (63,741 | ) | (492,646 | ) | (192,358 | ) | |||||||||||||||||||
Net loss attributable to ordinary shareholders | (232,910 | ) | (47,988 | ) | (96,412 | ) | (63,741 | ) | (492,646 | ) | (192,358 | ) | |||||||||||||||||||
Loss per share - basic and diluted | 12 | (2.64 | ) | (0.66 | ) | 12 | (1.01 | ) | (0.84 | ) | (5.34 | ) | (2.59 | ) | |||||||||||||||||
Weighted-average shares used in calculating net loss per ordinary share - basic and diluted | 88,374,928 | 72,956,538 | 95,035,432 | 75,436,646 | 92,174,838 | 74,381,115 |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||
Three Months Ended March 31, | 2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||
2021 | 2020 | |||||||||||||||||||||||
$ | $ | $ | $ | $ | $ | |||||||||||||||||||
Net loss | (232,910 | ) | (47,988 | ) | (96,412 | ) | (63,741 | ) | (492,646 | ) | (192,358 | ) | ||||||||||||
Other comprehensive income, net of tax of NaN: | ||||||||||||||||||||||||
Other comprehensive income (loss), net of tax of NaN: | ||||||||||||||||||||||||
Foreign currency translation adjustments | 2,900 | 3,539 | 1,741 | (9,901 | ) | (600 | ) | (7,535 | ) | |||||||||||||||
Comprehensive loss | (230,010 | ) | (44,449 | ) | (94,671 | ) | (73,642 | ) | (493,246 | ) | (199,893 | ) | ||||||||||||
Ordinary Shares | Additional paid in capital | Accumulated deficit | Accumulated other comprehensive (loss) income | Treasury Stock | Total | |||||||||||||||||||||||||||||||||||||||||||||||||||
Ordinary shares | Additional | Accumulated other | Number of Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||||||||||||||||||||||||
Number of Shares | Amount | paid in capital | Accumulated deficit | comprehensive (loss) income | Total | |||||||||||||||||||||||||||||||||||||||||||||||||||
$ | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2020 | 87,811,026 | 5 | 1,897,467 | (713,603 | ) | (14,524 | ) | 1,169,345 | 87,811,026 | 5 | 1,897,467 | (713,603 | ) | (14,524 | ) | — | — | 1,169,345 | ||||||||||||||||||||||||||||||||||||||
Issuance of ordinary shares upon vesting of restricted shares | 81,600 | 0 | 0 | — | — | 0 | 81,600 | 0 | 0 | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Exercise of shares option | 58,364 | 0 | 702 | — | — | 702 | 58,364 | 0 | 702 | — | — | — | — | 702 | ||||||||||||||||||||||||||||||||||||||||||
Issuance of ordinary shares in connection with collaboration and license arrangement (Note 16) | 568,182 | 0 | 62,250 | — | — | 62,250 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of ordinary shares in connection with collaboration and license arrangement (Note 15) | 568,182 | 0 | 62,250 | — | — | — | — | 62,250 | ||||||||||||||||||||||||||||||||||||||||||||||||
Issuance cost adjustment for secondary listing | — | — | 65 | — | — | 65 | — | — | 65 | — | — | — | — | 65 | ||||||||||||||||||||||||||||||||||||||||||
Share-based compensation | — | — | 7,318 | — | — | — | — | 7,318 | ||||||||||||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | (232,910 | ) | — | — | — | (232,910 | ) | ||||||||||||||||||||||||||||||||||||||||||||||
Foreign currency translatio n | — | — | — | — | 2,900 | — | — | 2,900 | ||||||||||||||||||||||||||||||||||||||||||||||||
Balance at March 31, 2021 | 88,519,172 | 5 | 1,967,802 | (946,513 | ) | (11,624 | ) | — | — | 1,009,670 | ||||||||||||||||||||||||||||||||||||||||||||||
Issuance of ordinary shares upon vesting of restricted shares | 32,100 | 0 | 0 | — | — | — | — | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||
Exercise of shares option | 490,517 | 0 | 3,289 | — | — | — | — | 3,289 | ||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of ordinary shares upon follow-on public offering, net of issuance cost of $879 | 5,716,400 | 1 | 817,995 | — | — | — | — | 817,996 | ||||||||||||||||||||||||||||||||||||||||||||||||
Receipt of employees’ shares to satisfy tax withholding obligations related to share-based compensation | — | — | — | — | — | (6,086 | ) | (924 | ) | (924 | ) | |||||||||||||||||||||||||||||||||||||||||||||
Share-based compensation | — | — | 7,318 | — | — | 7,318 | — | — | 10,232 | — | — | — | — | 10,232 | ||||||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | (232,910 | ) | — | (232,910 | ) | — | — | — | (163,324 | ) | — | — | — | (163,324 | ) | ||||||||||||||||||||||||||||||||||||||
Foreign currency translation | — | — | — | — | 2,900 | 2,900 | — | — | — | — | (5,241 | ) | — | — | (5,241 | ) | ||||||||||||||||||||||||||||||||||||||||
Balance at March 31, 2021 | 88,519,172 | 5 | 1,967,802 | (946,513 | ) | (11,624 | ) | 1,009,670 | ||||||||||||||||||||||||||||||||||||||||||||||||
Balance at June 30, 2021 | 94,758,189 | 6 | 2,799,318 | (1,109,837 | ) | (16,865 | ) | (6,086 | ) | (924 | ) | 1,671,698 | ||||||||||||||||||||||||||||||||||||||||||||
Issuance of ordinary shares upon vesting of restricted shares | 54,050 | 0 | 0 | — | — | — | — | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||
Exercise of shares option | 461,350 | 0 | 2,916 | — | — | — | — | 2,916 | ||||||||||||||||||||||||||||||||||||||||||||||||
Issuance cost adjustment for follow-on public offering | — | — | 40 | — | — | — | — | 40 | ||||||||||||||||||||||||||||||||||||||||||||||||
Receipt of employees’ shares to satisfy tax withholding obligations related to share-based compensation | — | — | — | — | — | (21,636 | ) | (2,609 | ) | (2,609 | ) | |||||||||||||||||||||||||||||||||||||||||||||
Share-based compensation | — | — | 10,556 | — | — | — | — | 10,556 | ||||||||||||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | (96,412 | ) | — | — | — | (96,412 | ) | ||||||||||||||||||||||||||||||||||||||||||||||
Foreign currency translation | — | — | — | — | 1,741 | — | — | 1,741 | ||||||||||||||||||||||||||||||||||||||||||||||||
Balance at September 30, 2021 | 95,273,589 | 6 | 2,812,830 | (1,206,249 | ) | (15,124 | ) | (27,722 | ) | (3,533 | ) | 1,587,930 | ||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2019 | 68,237,247 | 4 | 734,734 | (444,698 | ) | 4,620 | 294,660 | 68,237,247 | 4 | 734,734 | (444,698 | ) | 4,620 | — | — | 294,660 | ||||||||||||||||||||||||||||||||||||||||
Issuance of ordinary shares upon vesting of restricted shares | 80,200 | 0 | 0 | — | — | 0 | 80,200 | 0 | 0 | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Exercise of shares option | 49,278 | 0 | 346 | — | — | 346 | 49,278 | 0 | 346 | — | — | — | — | 346 | ||||||||||||||||||||||||||||||||||||||||||
Issuance of ordinary shares upon follow-on public offering, net of issuance cost of $740 | 6,300,000 | 0 | 280,568 | — | — | 280,568 | 6,300,000 | 0 | 280,568 | — | — | — | — | 280,568 | ||||||||||||||||||||||||||||||||||||||||||
Share-based compensation | — | — | 6,463 | — | — | 6,463 | — | — | 6,463 | — | — | — | — | 6,463 | ||||||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | (47,988 | ) | — | (47,988 | ) | — | — | — | (47,988 | ) | — | — | — | (47,988 | ) | ||||||||||||||||||||||||||||||||||||||
Foreign currency translation | — | — | — | — | 3,539 | 3,539 | — | — | — | — | 3,539 | — | — | 3,539 | ||||||||||||||||||||||||||||||||||||||||||
Balance at March 31, 2020 | 74,666,725 | 4 | 1,022,111 | (492,686 | ) | 8,159 | 537,588 | 74,666,725 | 4 | 1,022,111 | (492,686 | ) | 8,159 | — | — | 537,588 | ||||||||||||||||||||||||||||||||||||||||
Issuance of ordinary shares upon vesting of restricted shares | 36,000 | 0 | 0 | — | — | — | — | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||
Exercise of shares option | 179,613 | 0 | 2,729 | — | — | — | — | 2,729 | ||||||||||||||||||||||||||||||||||||||||||||||||
Issuance cost adjustment for follow-on public offering | — | — | (13 | ) | — | — | — | — | (13 | ) | ||||||||||||||||||||||||||||||||||||||||||||||
Share-based compensation | — | — | 6,964 | — | — | — | — | 6,964 | ||||||||||||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | (80,629 | ) | — | — | — | (80,629 | ) | ||||||||||||||||||||||||||||||||||||||||||||||
Foreign currency translation | — | — | — | — | (1,173 | ) | — | — | (1,173 | ) | ||||||||||||||||||||||||||||||||||||||||||||||
Balance at June 30, 2020 | 74,882,338 | 4 | 1,031,791 | (573,315 | ) | 6,986 | — | — | 465,466 | |||||||||||||||||||||||||||||||||||||||||||||||
Issuance of ordinary shares upon vesting of restricted shares | 90,468 | 0 | 0 | — | — | — | — | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||
Exercise of shares option | 560,662 | 0 | 1,008 | — | — | — | — | 1,008 | ||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of ordinary shares upon secondary listing, net of issuance cost of $5,634 | 10,564,050 | 1 | 739,232 | — | — | — | — | 739,233 | ||||||||||||||||||||||||||||||||||||||||||||||||
Issuance cost adjustment for follow-on public offering | — | — | (2 | ) | — | — | — | — | (2 | ) | ||||||||||||||||||||||||||||||||||||||||||||||
Share-based compensation | — | — | 6,978 | — | — | — | — | 6,978 | ||||||||||||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | (63,741 | ) | — | — | — | (63,741 | ) | ||||||||||||||||||||||||||||||||||||||||||||||
Foreign currency translation | — | — | — | — | (9,901 | ) | — | — | (9,901 | ) | ||||||||||||||||||||||||||||||||||||||||||||||
Balance at September 00030, 2020 | 86,097,518 | 5 | 1,779,007 | (637,056 | ) | (2,915 | ) | — | — | 1,139,041 | ||||||||||||||||||||||||||||||||||||||||||||||
Nine Months Ended September 30, | ||||||||||||||||
Three Months Ended March 31, | 2021 | 2020 | ||||||||||||||
2021 | 2020 | |||||||||||||||
$ | $ | $ | $ | |||||||||||||
Operating activities | ||||||||||||||||
Net loss | (232,910 | ) | (47,988 | ) | (492,646 | ) | (192,358 | ) | ||||||||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||||||||||
Allowance for doubtful accounts | 1 | 1 | 5 | 2 | ||||||||||||
Inventory write-down | 14 | — �� | 402 | — | ||||||||||||
Depreciation and amortization expenses | 1,448 | 1,070 | 4,612 | 3,253 | ||||||||||||
Amortization of deferred income | (78 | ) | (78 | ) | (234 | ) | (234 | ) | ||||||||
Share-based compensation | 7,318 | 6,463 | 28,106 | 20,405 | ||||||||||||
Noncash research and development expenses | 62,250 | — | ||||||||||||||
Share of (gain) loss from equity method investment | (195 | ) | 137 | |||||||||||||
Noncash research and development expenses (Note 15) | 62,250 | — | ||||||||||||||
Share of loss from equity method investment | 548 | 671 | ||||||||||||||
Loss from fair value changes of equity investment with readily determinable fair value | 9,930 | 0 | ||||||||||||||
Loss on disposal of property and equipment | 4 | — | 12 | 1 | ||||||||||||
Noncash lease expenses | 1,322 | 1,062 | 4,595 | 3,251 | ||||||||||||
Changes in operating assets and liabilities: | ||||||||||||||||
Accounts receivable | (3,651 | ) | (296 | ) | (15,858 | ) | (3,704 | ) | ||||||||
Inventories | 502 | (45 | ) | 248 | (3,631 | ) | ||||||||||
Prepayments and other current assets | (3,386 | ) | (1,375 | ) | (6,142 | ) | (3,564 | ) | ||||||||
Long term deposits | (47 | ) | (349 | ) | ||||||||||||
Long - term deposits | (39 | ) | (474 | ) | ||||||||||||
Value added tax recoverable | (1,558 | ) | (1,156 | ) | (1,249 | ) | (6,845 | ) | ||||||||
Accounts payable | (21,226 | ) | 4,495 | (11,235 | ) | 5,217 | ||||||||||
Other current liabilities | 21,707 | (1,408 | ) | 23,429 | (4,981 | ) | ||||||||||
Operating lease liabilities | (893 | ) | (663 | ) | (3,834 | ) | (2,335 | ) | ||||||||
Deferred income | (122 | ) | 289 | 863 | 13,606 | |||||||||||
Net cash used in operating activities | (169,500 | ) | (39,841 | ) | (396,237 | ) | (171,720 | ) | ||||||||
Cash flows from investing activities: | ||||||||||||||||
Proceeds from maturity of short-term investments | 743,902 | 50,000 | ||||||||||||||
Purchases of short-term investments | (170,000 | ) | (749,676 | ) | ||||||||||||
Proceeds from maturity of short-term investment | 743,902 | — | ||||||||||||||
Payment for investment in equity investee | (30,000 | ) | — | |||||||||||||
Disposal of property and equipment | 3 | — | ||||||||||||||
Purchase of property and equipment | (1,683 | ) | (1,043 | ) | (11,920 | ) | (4,835 | ) | ||||||||
Purchase of intangible assets | (214 | ) | (5 | ) | (539 | ) | (370 | ) | ||||||||
Net cash used in investing activities | 742,005 | 48,952 | ||||||||||||||
Net cash provided by (used in) investing activities | 531,446 | (754,881 | ) | |||||||||||||
Cash flows from financing activities: | ||||||||||||||||
Repayment of short-term borrowings | — | (1,430 | ) | — | (4,292 | ) | ||||||||||
Proceeds from exercises of stock options | 702 | 346 | 6,907 | 4,083 | ||||||||||||
Proceeds from issuance of ordinary shares upon public offerings | — | 281,295 | 818,874 | 1,025,970 | ||||||||||||
Payment of public offering costs | (973 | ) | (727 | ) | (1,836 | ) | (1,275 | ) | ||||||||
Employee taxes paid related to net share settlement of equity awards | (3,467 | ) | — | |||||||||||||
Net cash (used in) provided by financing activities | (271 | ) | 279,484 | |||||||||||||
Net cash provided by financing activities | 820,478 | 1,024,486 | ||||||||||||||
Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash | (930 | ) | (947 | ) | 695 | 2,062 | ||||||||||
Net increase in cash, cash equivalents and restricted cash | 571,304 | 287,648 | 956,382 | 99,947 | ||||||||||||
Cash, cash equivalents and restricted cash - beginning of period | 442,859 | 76,442 | 442,859 | 76,442 | ||||||||||||
Cash, cash equivalents and restricted cash - end of period | 1,014,163 | 364,090 | 1,399,241 | 176,389 | ||||||||||||
Supplemental disclosure on non-cash investing and financing activities: | ||||||||||||||||
Payables for purchase of property and equipment | 439 | 280 | 1,797 | 2,334 | ||||||||||||
Payables for intangible assets | 26 | 11 | 24 | 21 | ||||||||||||
Payables for public offering costs | 26 | — | — | 4,909 | ||||||||||||
Supplemental disclosure of cash flow information: | ||||||||||||||||
Cash and cash equivalents | 1,013,420 | 363,580 | 1,398,498 | 175,879 | ||||||||||||
Restricted cash, non-current | 743 | 510 | 743 | 510 | ||||||||||||
Total cash and cash equivalents and restricted cash | 1,014,163 | 364,090 | 1,399,241 | 176,389 | ||||||||||||
Interest paid | — | 67 | — | 157 |
Description | Fair Value as of September 30, 2021 US$ | Fair Value Measurement at Reporting Date Using Quoted Prices in Active Markets for Identical Assets (Level 1) US$ | ||||||
Equity Investments with Readily Determinable Fair Value | 20,070 | 20,070 |
As of | ||||||||||||||||
As of | September 30, 2021 | December 31, 2020 | ||||||||||||||
March 31, 2021 | December 31, 2020 | |||||||||||||||
$ | $ | $ | $ | |||||||||||||
Cash at bank and in hand | 1,012,587 | 441,283 | 1,097,430 | 441,283 | ||||||||||||
Cash equivalents | 833 | 833 | ||||||||||||||
Cash equivalents (note (i)) | 301,068 | 833 | ||||||||||||||
1,013,420 | 442,116 | 1,398,498 | 442,116 | |||||||||||||
Denominated in: | ||||||||||||||||
US$ | 186,078 | 297,813 | 762,209 | 297,813 | ||||||||||||
RMB (note (i)) | 37,732 | 23,898 | ||||||||||||||
RMB (note (ii)) | 28,802 | 23,898 | ||||||||||||||
Hong Kong dollar (“HK$”) | 789,029 | 119,695 | 607,323 | 119,695 | ||||||||||||
Australian dollar (“A$”) | 581 | 710 | 134 | 710 | ||||||||||||
Taiwan dollar (“TW$”) | 30 | — | ||||||||||||||
1,013,420 | 442,116 | 1,398,498 | 442,116 | |||||||||||||
(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 | ||||||||||||||||
As of | September 30, 2021 | December 31, 2020 | ||||||||||||||
March 31, 2021 | December 31, 2020 | |||||||||||||||
$ | $ | $ | $ | |||||||||||||
Finished goods | 2,703 | 3,041 | 5,298 | 3,041 | ||||||||||||
Raw materials | 9,588 | 10,103 | 7,196 | 10,103 | ||||||||||||
Work in process | 338 | 0 | ||||||||||||||
Inventories | 12,629 | 13,144 | 12,494 | 13,144 | ||||||||||||
As of | ||||||||||||||||
As of | September 30, 2021 | December 31, 2020 | ||||||||||||||
March 31, 2021 | December 31, 2020 | |||||||||||||||
$ | $ | $ | $ | |||||||||||||
Office equipment | 428 | 430 | 802 | 430 | ||||||||||||
Electronic equipment | 2,876 | 2,646 | 3,771 | 2,646 | ||||||||||||
Vehicle | 194 | 143 | 217 | 143 | ||||||||||||
Laboratory equipment | 12,357 | 11,933 | 15,274 | 11,933 | ||||||||||||
Manufacturing equipment | 12,116 | 12,198 | 13,313 | 12,198 | ||||||||||||
Leasehold improvements | 9,642 | 9,641 | 9,909 | 9,641 | ||||||||||||
Construction in progress | 2,915 | 2,423 | 8,306 | 2,423 | ||||||||||||
40,528 | 39,414 | 51,592 | 39,414 | |||||||||||||
Less: accumulated depreciation | (11,512 | ) | (10,252 | ) | (14,505 | ) | (10,252 | ) | ||||||||
Property and equipment, net | 29,016 | 29,162 | 37,087 | 29,162 | ||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||
Three Months Ended March 31, | 2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||
2021 | 2020 | |||||||||||||||||||||||
$ | $ | $ | $ | $ | $ | |||||||||||||||||||
Product revenue - gross | 46,555 | 8,937 | 47,555 | 17,152 | 135,490 | 37,567 | ||||||||||||||||||
Less: Rebate | (26,452 | ) | (719 | ) | ||||||||||||||||||||
Less: Rebate and sales return | (4,452 | ) | (2,501 | ) | (35,349 | ) | (3,703 | ) | ||||||||||||||||
Product revenue - net | 20,103 | 8,218 | 43,103 | 14,651 | 100,141 | 33,864 | ||||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||
Three Months Ended March 31, | 2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||
2021 | 2020 | |||||||||||||||||||||||
$ | $ | $ | $ | $ | $ | |||||||||||||||||||
ZEJULA | 12,606 | 6,345 | 28,162 | 8,503 | 64,134 | 22,294 | ||||||||||||||||||
Optune | 7,130 | 1,873 | 10,653 | 5,950 | 27,318 | 11,372 | ||||||||||||||||||
Others | 367 | — | ||||||||||||||||||||||
QINLOCK | 4,288 | 198 | 8,689 | 198 | ||||||||||||||||||||
Total product revenue - net | 20,103 | 8,218 | ||||||||||||||||||||||
Product revenue - net | 43,103 | 14,651 | 100,141 | 33,864 | ||||||||||||||||||||
As of | ||||||||
March 31, 2021 | December 31, 2020 | |||||||
$ | $ | |||||||
Payroll | 7,694 | 13,694 | ||||||
Professional service fee | 3,274 | 3,128 | ||||||
Payables for purchase of property and equipment | 439 | 788 | ||||||
Advance from customers | 3,280 | — | ||||||
Accrued rebate to distributors | 23,166 | 7,067 | ||||||
Others (note (i)) | 7,786 | 5,519 | ||||||
Total | 45,639 | 30,196 | ||||||
Three Months Ended March 31, | ||||||||
2021 | 2020 | |||||||
Numerator: | ||||||||
Net loss attributable to ordinary shareholders | (232,910 | ) | (47,988 | ) | ||||
Denominator: | ||||||||
Weighted average number of ordinary shares- basic and diluted | 88,374,928 | 72,956,538 | ||||||
Net loss per share-basic and diluted | (2.64 | ) | (0.66 | ) | ||||
As of | ||||||||
March 31, 2021 | March 31, 2020 | |||||||
Share options | 8,693,274 | 9,903,396 | ||||||
Non-vested restricted shares | 480,010 | 725,068 |
As of | ||||||||
September 30, 2021 | December 31, 2020 | |||||||
$ | $ | |||||||
Payroll | 18,926 | 13,694 | ||||||
Accrued professional service fee | 3,607 | 3,128 | ||||||
Payables for purchase of property and equipment | 1,797 | 788 | ||||||
Accrued rebate to distributors | 10,803 | 7,067 | ||||||
Tax payable | 10,989 | 952 | ||||||
Others (note (i)) | 8,170 | 4,567 | ||||||
Total | 54,292 | 30,196 | ||||||
(i) | Others are mainly payables to employees for exercising the share-based compensations, payables related to travel and business entertainment expenses. |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||
$ | $ | $ | $ | |||||||||||||
Numerator: | ||||||||||||||||
Net loss attributable to ordinary shareholders | (96,412 | ) | (63,741 | ) | (492,646 | ) | (192,358 | ) | ||||||||
Denominator: | ||||||||||||||||
Weighted average number of ordinary shares- basic and diluted | 95,035,432 | 75,436,646 | 92,174,838 | 74,381,115 | ||||||||||||
Net loss per share - basic and diluted | (1.01 | ) | (0.84 | ) | (5.34 | ) | (2.59 | ) | ||||||||
As of | ||||||||
September 30, 2021 | September 30, 2020 | |||||||
Share options | 8,180,157 | 9,093,582 | ||||||
Non-vested restricted shares | 636,619 | 597,850 |
Company Name | Relationship with the Group | |
MEDx (Suzhou) Translational Medicine Co., Ltd. | Significant influence held by Samantha Du’s (Director, Chairwoman and Chief Executive Officer of the Company) immediate family |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||
Three Months Ended March 31, | 2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||
2021 | 2020 | |||||||||||||||||||||||
$ | $ | $ | $ | $ | $ | |||||||||||||||||||
Selling, general and administrative | 3,259 | 2,744 | 4,119 | 2,952 | 11,501 | 8,500 | ||||||||||||||||||
Research and development | 2,290 | 2,177 | 3,056 | 2,411 | 8,450 | 7,218 | ||||||||||||||||||
Total | 5,549 | 4,921 | 7,175 | 5,363 | 19,951 | 15,718 | ||||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||
Three Months Ended March 31, | 2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||
2021 | 2020 | |||||||||||||||||||||||
$ | $ | $ | $ | $ | $ | |||||||||||||||||||
Selling, general and administrative | 1,211 | 1,068 | 2,028 | 1,065 | 5,078 | 3,179 | ||||||||||||||||||
Research and development | 558 | 474 | 1,353 | 550 | 3,077 | 1,508 | ||||||||||||||||||
Total | 1,769 | 1,542 | 3,381 | 1,615 | 8,155 | 4,687 | ||||||||||||||||||
(in thousands, except share and per share data) | Three months ended March 31, | |||||||||||||||||||||||
Three months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||||||||||
(in thousands, except share and per share data) | 2021 | 2020 | ||||||||||||||||||||||
Revenue | $ | 20,103 | $ | 8,218 | $ | 43,103 | $ | 14,651 | $ | 100,141 | $ | 33,864 | ||||||||||||
Expenses: | ||||||||||||||||||||||||
Cost of sales | (7,505 | ) | (2,084 | ) | (12,162 | ) | (4,934 | ) | (30,535 | ) | (9,914 | ) | ||||||||||||
Research and development | (203,852 | ) | (33,742 | ) | (55,144 | ) | (58,100 | ) | (401,220 | ) | (160,149 | ) | ||||||||||||
Selling, general and administrative | (35,838 | ) | (18,714 | ) | (59,002 | ) | (27,874 | ) | (149,254 | ) | (70,346 | ) | ||||||||||||
Loss from operations | $ | (227,092 | ) | $ | (46,322 | ) | $ | (83,205 | ) | $ | (76,257 | ) | $ | (480,868 | ) | $ | (206,545 | ) | ||||||
Interest income | 214 | 1,655 | 713 | 866 | 1,171 | 3,748 | ||||||||||||||||||
Interest expenses | — | (59 | ) | — | (43 | ) | — | (157 | ) | |||||||||||||||
Other expense, net | (6,227 | ) | (3,125 | ) | ||||||||||||||||||||
Other (expenses) income, net | (13,580 | ) | 11,958 | (12,401 | ) | 11,267 | ||||||||||||||||||
Loss before income tax and share of loss from equity method investment | $ | (233,105 | ) | $ | (47,851 | ) | $ | (96,072 | ) | $ | (63,476 | ) | $ | (492,098 | ) | $ | (191,687 | ) | ||||||
Income tax expense | — | — | — | — | — | — | ||||||||||||||||||
Share of gain (loss) from equity method investment | 195 | (137 | ) | |||||||||||||||||||||
Share of loss from equity method investment | (340 | ) | (265 | ) | (548 | ) | (671 | ) | ||||||||||||||||
Net loss attributable to ordinary shareholders | $ | (232,910 | ) | $ | (47,988 | ) | $ | (96,412 | ) | $ | (63,741 | ) | $ | (492,646 | ) | $ | (192,358 | ) | ||||||
Weighted-average shares used in calculating net loss per ordinary share, basic and diluted | 88,374,928 | 72,956,538 | 95,035,432 | 75,436,646 | 92,174,838 | 74,381,115 | ||||||||||||||||||
Net loss per share, basic and diluted | $ | (2.64 | ) | $ | (0.66 | ) | $ | (1.01 | ) | $ | (0.84 | ) | $ | (5.34 | ) | $ | (2.59 | ) |
(in thousands) | Three months ended March 31, | |||||||||||||||||||||||||||||||
Three Months Ended September 30, | ||||||||||||||||||||||||||||||||
(in thousands) | 2021 | % | 2020 | % | 2021 | % | 2020 | % | ||||||||||||||||||||||||
$ | 12,606 | 62.7 | $ | 6,345 | 77.2 | $ | 28,162 | 65.3 | % | $ | 8,503 | 58.0 | % | |||||||||||||||||||
Optune | 7,130 | 35.5 | 1,873 | 22.8 | 10,653 | 24.7 | % | 5,950 | 40.6 | % | ||||||||||||||||||||||
Others | 367 | 1.8 | — | — | ||||||||||||||||||||||||||||
QINLOCK | 4,288 | 10.0 | % | 198 | 1.4 | % | ||||||||||||||||||||||||||
Total product revenue—Net | $ | 20,103 | 100.0 | $ | 8,218 | 100.0 | $ | 43,103 | 100.0 | % | $ | 14,651 | 100.0 | % | ||||||||||||||||||
Three Months Ended September 30, | ||||||||||||||||||||||||||||||||
(in thousands) | Three months ended March 31, | 2021 | % | 2020 | % | |||||||||||||||||||||||||||
2021 | % | 2020 | % | |||||||||||||||||||||||||||||
Research and development expenses: | ||||||||||||||||||||||||||||||||
Research and Development Expenses: | ||||||||||||||||||||||||||||||||
Personnel compensation and related costs | $ | 12,697 | 6.2 | $ | 10,004 | 29.6 | $ | 20,564 | 37.3 | % | $ | 12,204 | 21.0 | % | ||||||||||||||||||
Licensing fees | 171,282 | 84.0 | 9,240 | 27.4 | 5,051 | 9.2 | % | 25,911 | 44.6 | % | ||||||||||||||||||||||
Payment to CROs/CMOs/Investigators | 15,526 | 7.6 | 9,830 | 29.1 | 17,102 | 31.0 | % | 14,414 | 24.8 | % | ||||||||||||||||||||||
Other costs | 4,347 | 2.2 | 4,668 | 13.9 | 12,427 | 22.5 | % | 5,571 | 9.6 | % | ||||||||||||||||||||||
Total | $ | 203,852 | 100.0 | $ | 33,742 | 100.0 | $ | 55,144 | 100.0 | % | $ | 58,100 | 100.0 | % | ||||||||||||||||||
Three Months Ended September 30, | ||||||||||||||||||||||||||||||||
(in thousands) | Three months ended March 31, | 2021 | % | 2020 | % | |||||||||||||||||||||||||||
2021 | % | 2020 | % | |||||||||||||||||||||||||||||
Research and development expenses: | ||||||||||||||||||||||||||||||||
Research and Development Expenses: | ||||||||||||||||||||||||||||||||
Clinical programs | $ | 186,256 | 91.4 | $ | 20,332 | 60.3 | $ | 20,248 | 36.7 | % | $ | 39,736 | 68.4 | % | ||||||||||||||||||
Pre-clinical programs | 2,500 | 1.2 | 688 | 2.0 | 9,988 | 18.1 | % | 2,728 | 4.7 | % | ||||||||||||||||||||||
Unallocated research and development expenses | 15,096 | 7.4 | 12,722 | 37.7 | 24,908 | 45.2 | % | 15,636 | 26.9 | % | ||||||||||||||||||||||
Total | $ | 203,852 | 100.0 | $ | 33,742 | 100.0 | $ | 55,144 | 100.0 | % | $ | 58,100 | 100.0 | % | ||||||||||||||||||
(in thousands) | Three months ended March 31, | |||||||||||||||||||||||||||||||
Three Months Ended September 30, | ||||||||||||||||||||||||||||||||
(in thousands) | 2021 | % | 2020 | % | 2021 | % | 2020 | % | ||||||||||||||||||||||||
Personnel compensation and related costs | $ | 23,412 | 65.3 | $ | 13,042 | 69.7 | $ | 34,088 | 57.8 | % | $ | 15,869 | 56.9 | % | ||||||||||||||||||
Professional service fees | 3,583 | 10.0 | 2,027 | 10.8 | 6,194 | 10.5 | % | 2,258 | 8.1 | % | ||||||||||||||||||||||
Other costs | 8,843 | 24.7 | 3,645 | 19.5 | 18,720 | 31.7 | % | 9,747 | 35.0 | % | ||||||||||||||||||||||
Total | $ | 35,838 | 100.0 | $ | 18,714 | 100.0 | $ | 59,002 | 100.0 | % | $ | 27,874 | 100.0 | % | ||||||||||||||||||
Nine Months Ended September 30, | ||||||||||||||||
(in thousands) | 2021 | % | 2020 | % | ||||||||||||
ZEJULA | $ | 64,134 | 64.0 | % | $ | 22,294 | 65.8 | % | ||||||||
Optune | 27,318 | 27.3 | % | 11,372 | 33.6 | % | ||||||||||
QINLOCK | 8,689 | 8.7 | % | 198 | 0.6 | % | ||||||||||
Total product revenue—Net | $ | 100,141 | 100.0 | % | $ | 33,864 | 100.0 | % | ||||||||
Nine Months Ended September 30, | ||||||||||||||||
(in thousands) | 2021 | % | 2020 | % | ||||||||||||
Research and Development Expenses: | ||||||||||||||||
Personnel compensation and related costs | $ | 50,543 | 12.6 | % | $ | 33,804 | 21.1 | % | ||||||||
Licensing fees | 274,299 | 68.4 | % | 77,631 | 48.5 | % | ||||||||||
Payment to CROs/CMOs/Investigators | 52,246 | 13.0 | % | 34,226 | 21.4 | % | ||||||||||
Other costs | 24,132 | 6.0 | % | 14,488 | 9.0 | % | ||||||||||
Total | $ | 401,220 | 100.0 | % | $ | 160,149 | 100.0 | % | ||||||||
Nine Months Ended September 30, | ||||||||||||||||
(in thousands) | 2021 | % | 2020 | % | ||||||||||||
Research and Development Expenses: | ||||||||||||||||
Clinical programs | $ | 299,937 | 74.8 | % | $ | 112,071 | 70.0 | % | ||||||||
Pre-clinical programs | 41,033 | 10.2 | % | 5,643 | 3.5 | % | ||||||||||
Unallocated research and development expenses | 60,250 | 15.0 | % | 42,435 | 26.5 | % | ||||||||||
Total | $ | 401,220 | 100.0 | % | $ | 160,149 | 100.0 | % | ||||||||
Nine Months Ended September 30, | ||||||||||||||||
(in thousands) | 2021 | % | 2020 | % | ||||||||||||
Selling, General and Administrative Expenses: | ||||||||||||||||
Personnel compensation and related costs | $ | 87,560 | 58.7 | % | $ | 42,951 | 61.1 | % | ||||||||
Professional service fees | 14,583 | 9.8 | % | 6,828 | 9.7 | % | ||||||||||
Other costs | 47,111 | 31.5 | % | 20,567 | 29.2 | % | ||||||||||
Total | $ | 149,254 | 100.0 | % | $ | 70,346 | 100.0 | % | ||||||||
Description | Fair Value as of September 30, 2021 | Fair Value Measurement at Reporting Date Using Quoted Prices in Active Markets for Identical Assets (Level 1) | ||||||
(in thousands) | ||||||||
Equity Investments with Readily Determinable Fair Value | $ | 20,070 | $ | 20,070 |
Nine months ended September 30, | ||||||||||||||||
(in thousands) | Three months ended March 31, | 2021 | 2020 | |||||||||||||
2021 | 2020 | |||||||||||||||
Net cash used in operating activities | $ | (169,500 | ) | $ | (39,841 | ) | $ | (396,237 | ) | $ | (171,720 | ) | ||||
Net cash provided by investing activities | 742,005 | 48,952 | ||||||||||||||
Net cash (used in) provided by financing activities | (271 | ) | 279,484 | |||||||||||||
Net cash provided by (used in) investing activities | 531,446 | (754,881 | ) | |||||||||||||
Net cash provided by financing activities | 820,478 | 1,024,486 | ||||||||||||||
Effect of foreign exchange rate changes | (930 | ) | (947 | ) | 695 | 2,062 | ||||||||||
Net increases in cash, cash equivalents and restricted cash | $ | 571,304 | $ | 287,648 | $ | 956,382 | $ | 99,947 | ||||||||
(in thousands) | Total | Less than 1 year | 1 to 3 years | 3 to 5 years | More than 5 years | Total | Less than 1 year | 1 to 3 years | 3 to 5 years | More than 5 years | ||||||||||||||||||||||||||||||
Purchase Obligations | $ | 22,498 | $ | 16,991 | $ | 5,507 | $ | — | $ | — | $ | 24,191 | $ | 24,191 | $ | — | $ | — | $ | — | ||||||||||||||||||||
Operating Lease Obligations | 18,232 | 5,573 | 6,228 | 4,379 | 2,052 | 17,497 | 6,573 | 5,349 | 4,160 | 1,415 |
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; |
* | Filed herewith |
** | Furnished herewith |
# | Management contract or compensatory plan or arrangement |
^ | 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: | By: | /s/ | ||||||
Name: | ||||||||
Title: | Chief |