Hello, ladies and gentlemen. Thank you for standing by. And welcome to Zai Lab’s Second Quarter 2024 Financial Results Conference Call. At this time, all 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 Chiou, Senior Vice President of Investor Relations. Please go ahead.

Thank you, Operator. Good morning, good evening, and welcome to Zai Lab’s second quarter 2024 earnings call. Today’s call will be led by Dr. Samantha Du, Zai Lab’s Founder, CEO and Chairperson. She will be joined by Josh Smiley, President and Chief Operating Officer; Dr. Rafael Amado, President and Head of Global Research and Development; and Dr. Yajing Chen, Chief Financial Officer. Jonathan Wang, our Chief Business Officer, will also be available to answer questions during the Q&A portion of the call. As a reminder, during today’s call, we’ll 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 differ materially from what we expect due to a variety of factors, including those discussed in our SEC filings. We will also refer to product revenue growth rates on a constant exchange rate basis, which is a non-GAAP financial measure. Please refer to our earnings release furnished with the SEC on August 6, 2024 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, and welcome everyone. In recent years, Zai Lab’s has grown significantly. We have built a strong commercial infrastructure, developed a promising portfolio of global and regional assets, and established an exceptional and efficient team across our commercial, R&D and functional areas. Today, Zai Lab is at a pivotal moment, advancing towards each of our three strategic imperatives, driving topline growth, expanding our pipeline and achieving profitability. In the second quarter, we made great strides in all areas. Our second quarter net product revenues grew 45% year-over-year, surpassing $100 million for the first time. The success of VYVGART launch significantly contributed to this growth, demonstrating our ability to provide innovative solutions that meet unmet medical needs. VYVGART has rapidly become a cornerstone of our current portfolio and is poised to be a major driver of our near-term growth. We also made significant progress with our pipeline. We received three product approvals and advanced important late-stage regional programs, such as KarXT for schizophrenia and bemarituzumab for first-line gastric cancer. We’re also expecting data in the coming months from our global pipeline for both our DLL3 ADC and CCR8 antibodies and we are prepared to advance these programs quickly. Additionally, we added a ROR1 ADC to our portfolio, which Rafael will cover in more detail. We are building a strong foundation for our growth well into the next decade. In addition to topline growth, we’re also focused on driving efficiencies and exercising financial prudence with improved efficiencies and a cash position of $730 million. Zai is in an excellent position. We are confident that our strategic initiatives and commitment to excellence will drive our success as we deliver innovative medicine to patients in need and generate significant value for our shareholders. I look forward to sharing more progress updates throughout the year. Now I’ll pass the call to Josh. Josh?

Thank you, Samantha, and thank you, everyone, for joining the call today. In Q2, our net product revenues grew 45% year-over-year to reach $100.1 million, driven by the successful launch of VYVGART and uptake of our portfolio. Starting with VYVGART, the launch is progressing exceptionally well across all aspects. First, the demand for VYVGART is strong. Nearly 3,300 new patients were treated in the second quarter, bringing the total number of new patients treated to 6,000 in the first half of this year. While it’s still early in the launch, we’re excited to see a growing percentage of patients returning for second and third treatment cycles. With over 170,000 patients living with gMG in China, we have a substantial market opportunity in this indication alone. Second, we made great progress with our targeted approach for hospital listing. By the end of the second quarter, we achieved over 70% of our full year hospital listing goal. Our specialized sales team is well-equipped to not only support VYVGART and gMG, but also the launch of efgartigimod subcu later this year and the expected launch for CIDP in 2025. Third, we’re seeing increasing adoption from physicians. Nearly 1,500 healthcare professionals have now prescribed VYVGART, with a third being repeat prescribers. Positive feedback from physicians and patients continue to fuel uptake and we are focused on providing these key stakeholders best-in-class support. The success of VYVGART is a significant milestone and continues to be one of our top commercialization priorities this year. Based on Q2 uptake and current trends, we are raising our full year VYVGART sales guidance to over $80 million for the year. Our primary focus will be on expanding access, securing new patient starts and driving usage in the maintenance setting, which we believe will extend the duration of treatment and…

Thank you, Josh. We continue to make significant progress with our pipeline in the second quarter, leading to multiple new approvals, as Josh highlighted, and advancements across several key programs. Starting with immunology, we received NMPA approval for the subcutaneous formulation of a efgartigimod for the treatment of generalized myasthenia gravis or gMG. With both an IV option and a 30-second to 90-second subcutaneous injection available, patients will benefit from a more personalized and flexible treatment approach. Beyond gMG, efgartigimod shows great promise for treating various other autoimmune conditions. In collaboration with our partner, argenx, we’re committed to exploring new therapeutic applications. In May, China’s NMPA accepted our supplemental biologics license application for the subcutaneous formulation of efgartigimod in chronic inflammatory demyelinating polyneuropathy or CIDP. There is a significant unmet need among the estimated 50,000 patients afflicted with CIDP in China. Currently, only a small fraction of these patients achieve remission with available care and many patients remain symptomatic. This disease can severely impact quality of life and we are urgently working to provide patients with a new, effective and safe treatment option. Later this year, we also plan to join argenx in a registrational study in Greater China to evaluate the safety and efficacy of efgartigimod subcutaneously administered by pre-filled syringe in Thyroid Eye Disease. Moving to neuroscience, we expect to complete enrollment in a registrational bridging study for KarXT for the treatment of schizophrenia in Greater China. We anticipate topline data by the end of 2024, the results of which are expected to support an NDA filing in the first half of 2025. KarXT also presents a significant opportunity as a treatment for Alzheimer’s disease with psychosis or ADP for short. In China, approximately 8 million people live with Alzheimer’s disease, with about 45% exhibiting psychotic symptoms. Currently,…

Thank you, Rafael. Now, I will discuss our second quarter 2024 financial results compared to the prior year period. Total net startup revenues for the second quarter of 2024 were $100.1 million, compared to $68.9 million for the same period in 2023, representing year-over-year growth of 45% or 47% on a constant currency basis. This growth was primarily driven by increased sales for VYVGART since its launch in September 2023 and an NRDL listing in January 2024, and increased sales for ZEJULA and NUZYRA. Primary drivers of this year-over-year revenue growth included the following. ZEJULA’s net product revenues increased 5% to $45 million, driven by increased hospital sales in first-line ovarian cancer and increased duration of treatment, supported by renewal of ZEJULA’s NRDL listing for the maintenance treatment of adult patients with first-line and recurrent ovarian cancer, effective January 1, 2024. VYVGART’s net product revenues grew to $23.2 million, compared to $0.1 million for the same period in 2023, driven by NRDL listing for the IV formulation for the treatment of gMG, effective January 1, 2024, and positive physician and patient reception, as well as increased patient access as VYVGART is added to hospital formularies. NUZYRA’s net product revenues grew 165% to $12.3 million, driven by the NRDL listings for the IV formulation for the treatment of adults with community-acquired bacterial pneumonia or CABP, and acute bacterial skin and skin structure infection or ABSSSI, in the first quarter of 2023, and the oral formulation for this indication in the first quarter of 2024. Turning now to our expenses, research and development expenses were $61.6 million in the second quarter of 2024, compared to $76.7 million for the same period in 2023. This decrease was primarily due to decreased milestone fees for our license and collaboration agreement, partially offset by increased…

[Operator Instructions] And now we’re going to take our first question. And the question comes from the line of questions Kyle Yang from Jefferies. Your line is open. Please ask your question.

Hey. It’s Michael Yee for Kyle Yang. We have two questions. First question is related to VYVGART. Obviously, maybe just talk a little bit about the trajectory, month-over-month adds. How are things going across the country? And tell us a little bit more about the metrics that you’re tracking as it relates to what gives you confidence on your guidance? And second question, maybe a little bit different. I appreciate the new in licensing deal for the ROR1. Can you just talk a little bit about business development? Are you particularly keenly focused on oncology? Would you go to other areas such as metabolic and obesity? I know you have neurology. So, kind of a little bit spread out everywhere, but are you considering things beyond just oncology? Thank you.

Good morning, Michael. It’s Josh. Thanks for the questions. I’ll start on VYVGART and then ask Jonathan to talk a little bit about business development strategy. I think first on VYVGART, we’re quite pleased with the performance through the first three quarters of launch going back to last year, but certainly the first half of this year is what gives us the confidence to say, well, we certainly see the trend exceeding $80 million for the year. First, I think, as you know, what we’ve been focused on in the early parts of launch is getting physicians experience using the product with their patients in gMG. And we’ve focused on those patients who are in an acute episode or not responding well to current treatment. And I think that’s gone really well. We’re seeing about a 1000 new patients a month, and that’s been consistent through the first half of the year and I don’t think we see any reason for that to start to slow down. Keep in mind that we see about 150,000 patients who are on label in China with gMG who will benefit and so far, I think we’ve treated somewhere in the range of about 7,000. So we’ve still got a long way to go. But I think with the initial emphasis on patients who aren’t doing well, what we’re seeing is physicians are getting really good experience. We’ve had over 1,500 physicians prescribed so far and of those physicians, a third of those are, I think, using it in pretty significant quantities now with their patients have used for second, third, and I think we have a pretty good percentage of physicians who have used it 10 or more times. So I think as we look now to the second half of the year, we’ll continue to focus on accruing new patients. As I say, we’re just scratching the surface, I think, in terms of the patients who can benefit from this important therapy. But we will begin to look at ensuring that we’re transitioning from just an acute sort of initial experience to ensuring patients are getting the full benefits from the maintenance aspects of the drug. So I think, we’re still early in the launch, Michael. But I think as we get into the second half of the year here, we will be focused on continuing to accrue patients, but also on ensuring they’re getting back in for their second, third cycles and so on, and no reason to believe that that won’t be a successful transition over time here. So more to come. But again, I think based on where we are right now, we’re confident that we’ll be over $80 million for the year. But still, as we think into 2025 and beyond, I think, just a really huge opportunity, I think, here for gMG patients in China. I’ll turn it over to Jonathan to talk about business development.

Hey, Mike. Thanks for the question. So I think the ROR1 is really a continuation of our strategy to grow the global pipeline. And in terms of our focus, as we grow that global pipeline, it’s primarily oncology and immunology programs. And even within that, we have certain areas that we’re more focusing on. So for example, ADC is an area that we are growing early-stage, as well as late-stage product pipeline. When we turn sort of more regional assets, which we are also very keenly looking at to build on the operational synergies there. In that area, we can probably go a bit beyond oncology and immunology like what we have done with KarXT, for example. When we see a product in a pipeline kind of opportunity that’s big enough, then certainly we want to leverage our capabilities in China, in Asia, in this part of the world. I think we have demonstrated capabilities across modalities, across diseases. But certainly globally, we are much more focused within oncology and immunology.

Thanks, Jonathan.

Operator, next question.

Thank you. [Operator Instructions] And now we’re going to take our next question. And the question comes from line of Anupam Rama from JPMorgan. Your line is open. Please ask your question.

Hey, guys. Thanks so much for taking the question and congrats on the progress. So, with subcu VYVGART now approved, how do you think about the dynamics of incorporating this modality into the marketplace in the near-term and what is kind of like a post-NRDL world look like for subcu? I’m assuming NRDL is coming next Jan, but given the approval came in July, would we have to wait for 2026 NRDL for subcu VYVGART? Maybe you could walk us through that timeline as well? Thanks so much.

Thanks, Anupam. It’s Josh. Yeah. We’re excited about the approval for subcu. Yeah, so just going back, of course, now IV is approved and on NRDL and that’s what we’re focused on. We’ll look to launch subcu later this year and it won’t be covered by NRDL this year. I think given the timing of the approval, which was post-June 30th, it’s unlikely that we’ll be able to add this product to NRDL for 2025. It’s an important addition to the franchise. It improves the patient experience versus IV in terms of time, as Rafael mentioned on the call. So, we’ll work to make sure that the product’s available for physicians and patients, but I think for now the base assumption is that that’ll be available through NRDL in 2026, not 2025. I don’t see that as a major impediment to continuing to drive the kind of patient uptake and maintenance that I talked about in the last answer. Today patients do go to the hospital for treatment, for follow-up, and of course, subcu, while a better experience, a faster experience, still requires physician administration. So we’re focused on getting that to NRDL as quickly as possible, but I think it’s likely a 2026, not 2025 opportunity. But then, of course, we’ll look to combine that with CIDP approval and launch and that’ll be our next big indication. But we still have, you know, a great opportunity in front of us with gMG, and as they say, I think the IV formulation works really well and fits the treatment paradigm for China today. Thanks, Anupam.

Yeah. I think -- hi. This is Samantha. I think Josh gave a very good overall perspective. But one thing I want to add is, even though we won’t be -- we’re unlikely to be included in the NRDL in January. However, for the subcus, we will continue to work with the municipal and provincial reimbursement plans, which we have done that before. For example, our OPTUNE is the second most supported by municipal and provincial insurance plan, second only to KEYTRUDA.

Yeah. Thank you, Samantha. Very good. Next question, Operator?

Yes. Of course. Just give me a moment. Now we’re going to take our next question and it comes from the line of Yigal Nochomovitz from Citigroup. Your line is open. Please ask your question.

Hi. Great. Thanks very much. So, back in the second quarter of 2023, you outlined the profitability guidance by the end of 2025 and the 50% year-on-year topline CAGR. It would be really helpful if you could just take a moment and walk us through the key drivers on the P&L more concretely to get to that profitability target by the end of 2025 and discuss the growth assumptions and what contribution you’d expect from subcu VYVGART, as well as CIDP, and potentially any contribution from these new launches of XACDURO and AUGTYRO that are coming at the end of the year? Thanks.

Thanks, Yigal. It’s Josh again. I’ll start, but then we’ll ask Yajing to maybe provide a few more comments on the P&L. But I think the biggest driver here for profitability for the full year of 2026 and achieving that toward the end of 2025 is the topline growth, as you’re suggesting through your question. We’ve said we expect compound annual growth of 50% or greater between the end of 2023 and the end of 2025, and that’s starting with the launch of efgartigimod this year, and you’re seeing us start to approach that number even in the second quarter. And the more that efgartigimod contributes to the total revenue base, the higher the sales growth is going to be. So I think the biggest thing to watch is over the next eight quarters to 12 quarters is the topline growing at 50 -- at or around 50% and I think if that’s the case, then the rest of the P&L falls into place. To your question about what’s the composition or contribution there, again, I think the biggest driver between now and the end of 2025 and into 2026 is going to be VYVGART, IV, gMG. I think that will be the biggest driver of growth just given where we are now and the timeline we have between now and 2026 to remind everyone that we are -- we don’t expect any other FcRns to be on NRDL and available over that time period certainly in through 2025. So we’ve got a really good open field in front of us here and tremendous patient opportunities. We will, as mentioned, we’ll launch three new products or product forms later this year. That includes XACDURO and repo. Expect launches for those products at the end of Q4. We’ll pursue NRDL listing over time, and I do expect that they will contribute growth, of course, to the franchise -- to the overall franchise. I think if you look at our base business, so ZEJULA, QINLOCK, NUZYRA and OPTUNE, we’ve said for this year you should expect cumulatively those products together to grow similar to last year, so that’s in or around a 20% range. And I think for the next year or two, we should expect those products to continue to grow and to approach something like that, probably not exactly 20%. But I think if you take the base business continuing to grow through 2026, add on significant growth from gMG, we’ll layer in CIDP next year, also with the subcu and then the new products that are coming, I think that gives us a lot of confidence that there’s a 50%-plus topline potential there. Most of the infrastructure to support those products are already in place, so I think we should be able to manage our expense base pretty well, but I’ll ask Yajing to make any final comments here.

Thank you, Josh.

Yajing?

Yeah. I’m online now. Thank you very much for the question. I think that we’re happy to see, right, we’re kind of happy to see the perspective of revenue growth. So as we grow the revenue at 50%, we are putting the operating expenses in control, meaning that we want to be as efficient as we can. As we communicated before, our G&A expenses are going to be flattish in the next few years, so we already built the infrastructure. You’re not going to expect to see the growth there. Our R&D expenditures will also remain relatively stable in the next couple of years as we’re running down the current studies and then ramping up some of the global studies. The area that you’re going to expect modest growth is the sales and marketing. As Josh mentioned, there are a new list of new launches in the next couple of years, but we are going to grow the commercial [inaudible] in a modest way, much, much smaller than the revenue growth. So, overall, you’re going to see the percent -- expenses as a percentage of revenue will continue to go down significantly year-over-year and we have demonstrated that in the prior three years, and we’re going to continue that trend in the next couple of years. That’s how -- that’s the path to get to the profitability by the end of 2025.

Okay. Thank you very much.

Thank you.

That was great. Just one follow-up.

Thank you.

Yeah.

Just one follow-up. I’m assuming that KarXT and bema are going to launch, I would think, in 2026. Is that a fair assumption? And once those are launched and then you have those two plus VYVGART plus the original four products, is there the potential to provide some sort of longer-term guidance for the entire commercial portfolio so investors can get a sense of the trajectory as we move into the second half of the decade?

Yeah. First, just to confirm, I think, both of those products should be contributing revenue in 2026. The exact timing of approvals, end of 2025, early 2026, or whatever is obviously contingent on getting the trials complete and submitted and otherwise. But certainly in 2026, we’d expect both of those products to be on the market. And yeah, I think at that point, as you know, Yigal, we gave guidance. The first guidance that we gave was last year and said that between, as I say, the end of 2023 and end of 2028, we expect sales growth to be at least 50% on a compound annual basis. I think as we get those products on the market and have a few years of history behind us with the first wave of launches, of course, we’ll be in a position to give a little bit more longer-term guidance. But I think the thing that is important to keep in mind is the products that will drive 50% plus sales growth between now and the end of 2028 are all still going to be in the growth phase of their launch trajectories. And if we can get to that kind of growth in 2028, there’s no reason that it shouldn’t continue at very high rates as we get to the end of the decade and early into the 2030s. I mean, of course, products like bema and KarXT by 2028 will still be early in their launch trajectory and we’ll be adding indications to VYVGART-like Thyroid Eye Disease and otherwise. So I think we’re quite optimistic about the long-term growth potential of the portfolio and we just need to take them one launch at a time. But so far, so good and we’re quite excited.

Thank you.

Thank you so much. Now we’re going to take our next question. And the question comes from the line of Louise Chen from Cantor. Your line is open. Please ask your question.

Hi. This is Sarah Dwyer on for Louise Chen from Cantor. Congratulations on the progress this quarter. We have two questions. One, kind of a follow-up to the previous question that we just talked about, which is the KarXT and the bema. As we’re getting closer to the registrational stage, how should we think about these two assets in terms of the contribution to the overall top and bottomline? And then maybe kind of a different question is the latest status on the DLL3 ADC and what kind of data we should expect later this year? Thank you.

Great. Thanks, Sarah. First on KarXT and bema, yes, I think as we’ve talked, we do expect those to be contributing to the company in 2026 for sure. Just to confirm sort of timelines with KarXT, we are -- we should complete the bridging study this quarter and look to submit that data by the end of the year or early next year. So that puts us well online for a timeline for a 2026 approval and launch. With bema, we’re in two first-line studies, FORTITUDE-101 and FORTITUDE-102, as Rafael mentioned. 101, the enrollment is complete and we should be in a position to release those results in conjunction with our partner, Amgen, sometime in early 2025 and submit. So I think certainly for the first-line doublet study, so this is bema with chemo, that approval should certainly hit sometime in early 2026. The FORTITUDE-102 is enrolling, and I think, it’s about six months or so behind. So again, I think both of those hopefully are contributing in 2026. I think overall, if you look at the opportunity for KarXT in schizophrenia, we’ve said in the past there’s 8 million patients diagnosed with schizophrenia in China. KarXT represents a really important advancement, the first sort of new mechanism that will be approved on a global basis in more than 30 years, I think. And I think a lot of interest and receptivity among thought leaders in China to get this product available for their patients. So I think there’s no reason this shouldn’t be a very significant opportunity, a $1 billion type of annual opportunity over time in China. We’re also joining the Alzheimer’s psychosis trial, and of course, that’s a big opportunity as well on the longer-term basis. I think for bema, if you look at gastric cancer in…

Thank you.

Thank you so much.

Now we’re going to take our next question. And the question comes from the line of Jonathan Chang from Leerink Partners. Your line is open. Please ask your question.

Hi, guys. Thanks for taking my questions. On bemarituzumab, can you discuss how enrollment in the Phase III FORTITUDE studies have progressed versus the plan and what are your latest thoughts on FGFR2b expression levels and the level of overlap with other markers like PD-L1? Thank you.

Thanks, Jonathan. I’ll start here, and Jon from our team may have some comments as well, but I think first in terms of enrollment, we’ve been quite pleased with the ability to enroll here. We’ve contributed significant amounts of patients to both FORTITUDE-101 and 102, just given the prevalence of gastric cancer in China and our, I think, very good clinical execution and relationships with key sites. So, as I mentioned, enrollment is complete in 101, and we’ll transition to completing the assessment and working towards a submission in conjunction with Amgen on a global basis, hopefully early next year. 102, as I say, is about six months behind, but enrollment’s going really well. So I think both of these -- you should expect both of these studies to be fundamentally complete in 2025 with hopefully good topline data available. And I think as we look at the opportunity, as I mentioned, I think if you look at the expression greater than 10%, it’s somewhere in the range of 75,000 to 100,000 patients in China. I think with -- and Jonathan can comment here too because he’s very close to this, but I think with relatively limited overlap, I think, with some of the other targeted agents in this case. But of course, our focus here is I think the bigger opportunity long-term is in the triplet study, so in combination with the PD-1 in a first-line setting. So quite excited about that opportunity. Jonathan, I don’t know if you have anything to add.

Yeah. Sure. Maybe just quick comments to add to Josh’s remarks. I think first, China contributes more than 50% of the majority of the gastric patients around the world. So since Zai joined the bema studies, which Zai joined much later than global, we contributed more patients in China than any other country in the world and a very significant percentage of the global enrollment. Thereby, we are accelerating the global timeline of bema to China and to other markets. On the expression levels, when we did the initial FORTITUDE-144 [ph] study, the Phase II study, whether the high expressions or the low-medium expressions was actually much more than what we expected before we started the Phase II studies. So FGFR2b is about 32% and of which high expression patients is about 18% of the overall patient population. So it is a very large patient group and the more higher expression we also found with FGFR2b, the more aggressive the tumor type. So therefore, bema showing much wider separation of the PFS and the OS curves in the original FORTITUDE-144 study. And we also saw there’s additive effect with agents like PD-1 and mind you, PD-1 in gastric cancer, the response rate is in the teens. So it works, but there’s probably a lot more room for improvement. So look, we’re very excited about bema. We think there’s a lot of potential to be transformative for these medicines and we’re looking forward to the data, which we are accelerating at the moment together with Amgen.

Thank you.

Thank you. Now we’re going to take our next question. And the question comes from the line of Jack Lin from Morgan Stanley. Your line is open. Please ask your question.

Hi. Thank you. Can you hear me?

Yes.

Hi. Thanks for taking my question and congrats on the stellar performance this quarter. So my question is on the subcutaneous VYVGART. I kind of understood the topic was touched upon earlier with particular detail on the NRDL timing. But I was wondering if company could expand on the kind of the commercial strategy, such as pricing to drive adoption, particularly given that a potential competition, rozanolixizumab was also accepted by the CDE for review and could potentially be approved later this year, which is also a subcu-based FcRn. So I also want to know if management could help share thoughts kind of comparing VYVGART with the two drugs and also how does UCB’s China commercial operation compare to us, especially in the immunology space? Thank you.

Thanks, Jack. It’s Josh. I’ll start. I think first, I think, as I mentioned and Samantha mentioned as well, we’ll do everything we can to make subcu a viable alternative and option for patients who have supplemental insurance or other ways of accessing it. But for now, the emphasis on the IV formulation works well. As I say, it fits very well into patient treatment patterns and how patients seek treatment for gMG in China. I think that the differentiation among the agents is really going to be around how does it improve the symptoms and manage the symptoms of gMG much more than the convenience or formulation piece. So I think we’re quite confident that the data that we have, that argenx has accumulated and that we are now accumulating in a real-world setting in China is going to give us, I think, a really strong position, even as other agents are potentially approved and on the market. Of course, anything that’s approved in the next number of months is not going to be eligible for NRDL listing until 2026. And again, I think by that point, the data that we’ve generated both in clinical trials but also now in a real-world setting with -- what will be tens of thousands of patients’ experience, I think, will put us in a really strong position. So we’re not, I think, overly concerned about the next approvals or the next-generation of agents. Of course, in any setting like this, having been involved in many launches over many years, having more competitors is both a challenge from a competitive perspective but also an opportunity, particularly in new classes where you have more good and high quality organizations talking to physicians and educating them and educating patients. So I think from that standpoint, we welcome some of the bigger companies with quality products. But I think on an individual basis, we think our data stands up really well and will be in a strong position for many years to come.

Thank you.

Thank you.

Thank you. Now we’re going to take the question. And it comes from Linhai Zhao from Goldman Sachs. Your line is open. Please ask your question.

Thanks for taking my question. I’m curious about the overall commercial strategy for OPTUNE going forward, especially given that I know that for GBM, we are now adopting a more focused commercial strategy to the top tier oncology companies where we could find more concentrated GBM patients. Just curious about would we adopt similar concentrated strategy for other indications? For example, we have larger indications in non-small cell lung cancer and potentially the pancreatic cancers which may be less concentrated compared to GBM. Then for the other indications, would you still consider adopting this concentrated commercial strategy for OPTUNE, and overall, how do you see the profitability at the program level for OPTUNE? Thanks.

Thanks for the question. It’s Josh. I’ll take a shot at this one. I think first, yeah, as it relates to GBM, we are -- we have enough experience now to understand where the best opportunities are from an economic perspective. And we have made some adjustments in the second quarter that’ll allow us to drive profitability through this indication. And I think the limiting factors here, of course, are reimbursement. And until or unless something changes in terms of NRDL eligibility for medical devices, I think, we’re always going to have to be focused on where it makes sense to deploy our resources and how to do that in a way that drives not just sales but also bottomline profits and you’ll see that that’s the focus we’ve initiated for Q2 and beyond for GBM. I think as it relates to the next opportunity in LUNAR in non-small cell lung cancer, we will take the same approach. I mean, we’re going to look and I mean, this is a product that, if approved, I think provides a really important treatment option in second-line lung cancer in China. And I think there’s good interest in having this product available. We’ll look and make sure that as we deploy our resources against it, that we’re going to put it against the opportunities where we can drive benefits for physicians and patients, but also benefits for shareholders. So I think it will, because of the supplemental insurance focus here, necessarily we’ll focus on areas where patients can get it and stay on the drug or stay on the technology and so on. But it’s a much bigger opportunity, I think, in just the number of patients who could benefit from TTFields in second-line lung cancer is pretty significant. I think we’re quite excited and anxious to see the results from the PANOVA trial at the end of this year in pancreatic. I think, as you indicated, that’s maybe not as concentrated an opportunity, but to have something that could work in pancreatic cancer and provide benefits, I think, is pretty significant. So I think that’s an opportunity that as the data is available, and if it looks good, I think, there’s a compelling opportunity there, and we’ll make sure we sort of optimize the launch there. But I think summary overall is really important technology. It -- we do have to take a focused approach here because of the reimbursement opportunity, but if it continues to show benefits in multiple tumors, there’s a lot to work with here. Thanks for the question.

Thanks. That’s very helpful.

Thank you. I’m showing no further questions at this time. I will now turn call back over to Zai Lab CEO, Samantha Du, for closing remarks.

Thank you, Operator. I want to thank everyone for taking the time to join us on the call today. We appreciate your support and look forward to updating you again after the third quarter of 2024. Operator, you may now disconnect this call.

This concludes today’s conference call. Thank you for participating. May now all disconnect. Speakers, please stand by.