Zai Lab Limited (ZLAB) 10-Q 9 May 23 2023 Q1 Quarterly report Financial data

Cover Page

Cover Page - shares	3 Months Ended
	Mar. 31, 2023	May 03, 2023
Document Information [Line Items]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Mar. 31, 2023
Document Transition Report	false
Entity File Number	001-38205
Entity Registrant Name	ZAI LAB LIMITED
Entity Incorporation, State or Country Code	E9
Entity Tax Identification Number	98-1144595
Entity Address, Address Line One	4560 Jinke Road
Entity Address, Address Line Two	Bldg. 1, Fourth Floor, Pudong
Entity Address, City or Town	Shanghai
Entity Address, Country	CN
Entity Address, Postal Zip Code	201210
City Area Code	86 21
Local Phone Number	6163 2588
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Emerging Growth Company	false
Entity Small Business	false
Entity Shell Company	false
Entity Central Index Key	0001704292
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q1
Amendment Flag	false
American Depositary Shares
Document Information [Line Items]
Title of 12(b) Security	American Depositary Shares, each representing 10 Ordinary Shares, par value $0.000006 per share
Trading Symbol	ZLAB
Security Exchange Name	NASDAQ
Entity Common Stock, Shares Outstanding		743,576,320
Ordinary Shares
Document Information [Line Items]
Title of 12(b) Security	Ordinary Shares, par value $0.000006 per share
Trading Symbol	9688
Entity Common Stock, Shares Outstanding		979,087,430

Unaudited Condensed Consolidate

Unaudited Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Current assets:
Cash and cash equivalents	$ 879,844	$ 1,008,470
Short-term investments	50,550	0
Accounts receivable (net of allowance for credit loss of $13 and $11 as of March 31, 2023 and December 31, 2022, respectively)	43,346	39,963
Notes receivable	17,381	8,608
Inventories, net	38,405	31,621
Prepayments and other current assets	42,772	35,674
Total current assets	1,072,298	1,124,336
Restricted cash, non-current	1,003	803
Long term investments (including the fair value measured investment of $6,872 and $6,431 as of March 31, 2023 and December 31, 2022, respectively)	6,872	6,431
Prepayments for equipment	1,721	1,396
Property and equipment, net	58,309	57,863
Operating lease right-of-use assets	20,148	19,512
Land use rights, net	6,920	6,892
Intangible assets, net	1,479	1,511
Long-term deposits	1,324	1,396
Total assets	1,170,074	1,220,140
Current liabilities:
Accounts payable	66,361	65,974
Current operating lease liabilities	7,318	7,050
Other current liabilities	50,881	66,818
Total current liabilities	124,560	139,842
Deferred income	30,968	21,360
Non-current operating lease liabilities	12,979	13,343
Other non-current liabilities	325	0
Total liabilities	168,832	174,545
Commitments and contingencies (Note 15)
Shareholders’ equity
Ordinary shares (par value of $0.000006 per share; 5,000,000,000 shares authorized; 967,197,350 and 962,455,850 shares issued as of March 31, 2023 and December 31, 2022, respectively; 963,688,740 and 960,219,570 shares outstanding as of March 31, 2023 and December 31, 2022, respectively)	6	6
Additional paid-in capital	2,911,454	2,893,120
Accumulated deficit	(1,910,504)	(1,861,360)
Accumulated other comprehensive income	17,272	25,685
Treasury Stock (at cost, 3,508,610 and 2,236,280 shares as of March 31, 2023 and December 31, 2022, respectively)	(16,986)	(11,856)
Total shareholders’ equity	1,001,242	1,045,595
Total liabilities and shareholders’ equity	$ 1,170,074	$ 1,220,140

Unaudited Condensed Consolida_2

Unaudited Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Statement of Financial Position [Abstract]
Accounts receivable, allowance for credit loss	$ 13	$ 11
Investments, fair value	$ 6,872	$ 6,431
Ordinary shares, par value (in dollars per share)	$ 0.000006	$ 0.000006
Ordinary shares, shares authorized (in shares)	5,000,000,000	5,000,000,000
Ordinary shares, shares issued (in shares)	967,197,350	962,455,850
Ordinary shares, shares outstanding (in shares)	963,688,740	960,219,570
Treasury Stock (in shares)	3,508,610	2,236,280

Unaudited Condensed Consolida_3

Unaudited Condensed Consolidated Statements of Operations - USD ($)	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Revenues:
Product revenue, net	$ 62,797,000	$ 46,095,000
Collaboration revenue	0	629,000
Total revenues	62,797,000	46,724,000
Expenses:
Cost of sales	(21,337,000)	(15,643,000)
Research and development	(48,472,000)	(53,854,000)
Selling, general, and administrative	(62,510,000)	(56,991,000)
Loss from operations	(69,522,000)	(79,764,000)
Interest income	10,232,000	188,000
Foreign currency gain	8,912,000	2,285,000
Other income (expenses), net	1,234,000	(4,882,000)
Loss before income tax and share of loss from equity method investment	(49,144,000)	(82,173,000)
Income tax expense	0	0
Share of loss from equity method investment	0	(221,000)
Net loss	(49,144,000)	(82,394,000)
Net loss attributable to ordinary shareholders - basic	(49,144,000)	(82,394,000)
Net loss attributable to ordinary shareholders - diluted	$ (49,144,000)	$ (82,394,000)
Loss per share/ADS - basic (in dollars per share)	$ (0.05)	$ (0.09)
Loss per share/ADS - diluted (in dollars per share)	$ (0.05)	$ (0.09)
Weighted-average shares/ADSs used in calculating net loss per ordinary share/ADS - basic (in shares)	961,444,780	955,499,030
Weighted-average shares/ADSs used in calculating net loss per ordinary share/ADS - diluted (in shares)	961,444,780	955,499,030
American Depositary Shares
Expenses:
Loss per share/ADS - basic (in dollars per share)	$ (0.51)	$ (0.86)
Loss per share/ADS - diluted (in dollars per share)	$ (0.51)	$ (0.86)
Weighted-average shares/ADSs used in calculating net loss per ordinary share/ADS - basic (in shares)	96,144,478	95,549,903
Weighted-average shares/ADSs used in calculating net loss per ordinary share/ADS - diluted (in shares)	96,144,478	95,549,903

Unaudited Condensed Consolida_4

Unaudited Condensed Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Statement of Comprehensive Income [Abstract]
Net loss	$ (49,144)	$ (82,394)
Other comprehensive income (loss), net of tax of nil:
Foreign currency translation adjustments	(8,413)	(2,193)
Comprehensive loss	$ (57,557)	$ (84,587)

Unaudited Condensed Consolida_5

Unaudited Condensed Consolidated Statements of Comprehensive Loss (Parenthetical) - USD ($)	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Statement of Comprehensive Income [Abstract]
Other comprehensive (loss) income, tax	$ 0	$ 0

Unaudited Condensed Consolida_6

Unaudited Condensed Consolidated Statements of Shareholders' Equity - USD ($) $ in Thousands	Total	Ordinary Shares	Additional paid in capital	Accumulated deficit	Accumulated other comprehensive income (loss)	Treasury Stock
Beginning balance (in shares) at Dec. 31, 2021		955,363,980
Beginning balance at Dec. 31, 2021	$ 1,379,956	$ 6	$ 2,825,948	$ (1,418,074)	$ (23,645)	$ (4,279)
Beginning balance (in shares) at Dec. 31, 2021						(382,930)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of ordinary shares upon vesting of restricted shares (in shares)		514,800
Issuance of ordinary shares upon vesting of restricted shares	0	$ 0	0
Exercise of shares options (in shares)		1,156,660
Exercise of shares options	297	$ 0	297
Receipt of employees’ shares to satisfy tax withholding obligations related to share-based compensation (in shares)						(15,150)
Receipt of employees’ shares to satisfy tax withholding obligations related to share-based compensation	(68)					$ (68)
Share-based compensation	12,410		12,410
Net loss	(82,394)			(82,394)
Foreign currency translation	(2,193)				(2,193)
Ending balance (in shares) at Mar. 31, 2022		957,035,440
Ending balance at Mar. 31, 2022	$ 1,308,008	$ 6	2,838,655	(1,500,468)	(25,838)	$ (4,347)
Ending balance (in shares) at Mar. 31, 2022						(398,080)
Beginning balance (in shares) at Dec. 31, 2022	960,219,570	962,455,850
Beginning balance at Dec. 31, 2022	$ 1,045,595	$ 6	2,893,120	(1,861,360)	25,685	$ (11,856)
Beginning balance (in shares) at Dec. 31, 2022	(2,236,280)					(2,236,280)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of ordinary shares upon vesting of restricted shares (in shares)		732,040
Issuance of ordinary shares upon vesting of restricted shares	$ 0	$ 0	0
Exercise of shares options (in shares)		4,009,460
Exercise of shares options	1,673	$ 0	1,673
Receipt of employees’ shares to satisfy tax withholding obligations related to share-based compensation (in shares)						(1,272,330)
Receipt of employees’ shares to satisfy tax withholding obligations related to share-based compensation	(5,130)					$ (5,130)
Share-based compensation	16,661		16,661
Net loss	(49,144)			(49,144)
Foreign currency translation	$ (8,413)				(8,413)
Ending balance (in shares) at Mar. 31, 2023	963,688,740	967,197,350
Ending balance at Mar. 31, 2023	$ 1,001,242	$ 6	$ 2,911,454	$ (1,910,504)	$ 17,272	$ (16,986)
Ending balance (in shares) at Mar. 31, 2023	(3,508,610)					(3,508,610)

Unaudited Condensed Consolida_7

Unaudited Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Cash flows from operating activities
Net loss	$ (49,144)	$ (82,394)
Adjustments to reconcile net loss to net cash used in operating activities:
Allowance for credit loss (gain)	1	(1)
Inventory write-down	377	138
Depreciation and amortization expenses	2,657	2,013
Amortization of deferred income	(582)	(708)
Share-based compensation	16,661	12,410
Share of loss from equity method investment	0	221
(Gain) Loss from fair value changes of equity investment with readily determinable fair value	(441)	6,939
Loss (gain) on disposal of property and equipment	64	(11)
Non-cash lease expenses	2,464	2,017
Foreign currency remeasurement gain	(8,912)	(2,285)
Changes in operating assets and liabilities:
Accounts receivable	(2,852)	14,080
Notes receivable	(8,599)	(3,513)
Inventories	(6,686)	(1,475)
Prepayments and other current assets	(6,470)	1,531
Long-term deposits	72	(71)
Value added tax recoverable	0	3,092
Accounts payable	(327)	(28,002)
Other current liabilities	(15,593)	(8,837)
Operating lease liabilities	(2,141)	(2,389)
Deferred income	9,839	118
Other non-current liabilities	325	0
Net cash used in operating activities	(69,287)	(87,127)
Cash flows from investing activities
Purchases of short-term investments	(100,000)	(120,274)
Proceeds from maturity of short-term investment	49,450	100,000
Disposal of property and equipment	112	25
Purchases of property and equipment	(3,513)	(9,743)
Purchases of intangible assets	(3)	(152)
Net cash used in investing activities	(53,954)	(30,144)
Cash flows from financing activities
Proceeds from exercises of stock options	1,197	297
Employee taxes paid related to settlement of equity awards	(5,083)	(39)
Net cash (used in) provided by financing activities	(3,886)	258
Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash	(1,299)	(130)
Net decrease in cash, cash equivalents and restricted cash	(128,426)	(117,143)
Cash, cash equivalents and restricted cash - beginning of period	1,009,273	964,903
Cash, cash equivalents and restricted cash - end of period	880,847	847,760
Supplemental disclosure on non-cash investing and financing activities
Payables for purchase of property and equipment	4,232	668
Payables for intangible assets	268	73
Payables for treasury stock	0	55
Receivables for stock option exercise under equity incentive plans	476	0
Right-of-use asset acquired under operating leases	2,662	4,596
Receivables for dispose of property and equipment	10	0
Supplemental disclosure of cash flow information:
Cash and cash equivalents	879,844	846,957
Restricted cash, non-current	1,003	803
Total cash and cash equivalents and restricted cash	$ 880,847	$ 847,760

Organization and Principal Acti

Organization and Principal Activities	3 Months Ended
	Mar. 31, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Organization and Principal Activities	Organization and Principal Activities Zai Lab Limited was incorporated on March 28, 2013 in the Cayman Islands as an exempted company with limited liability under the Companies Act of the Cayman Islands (as amended). Zai Lab Limited and its subsidiaries (collectively referred to as the “Company”) are focused on discovering, developing, and commercializing products and product candidates that address medical conditions with significant unmet needs, including in the areas of oncology, autoimmune disorders, infectious diseases, and neuroscience. The Company’s principal operations and geographic markets are in Greater China. The Company has a substantial presence in Greater China and the United States. The accompanying unaudited condensed consolidated financial statements are the financial statements of the Company.

Basis of Presentation and Conso

Basis of Presentation and Consolidation and Significant Accounting Policies	3 Months Ended
	Mar. 31, 2023
Accounting Policies [Abstract]
Basis of Presentation and Consolidation and Significant Accounting Policies	Basis of Presentation and Consolidation and Significant Accounting Policies (a) Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”), and applicable rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”), regarding interim financial reporting. Certain information and note disclosures normally included in the financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. As such, the information included in this report should be read in conjunction with the consolidated financial statements and accompanying notes included in the Annual Report on Form 10-K for the year ended December 31, 2022 filed with the SEC on March 1, 2023 (the “2022 Annual Report”). The December 31, 2022 condensed consolidated balance sheet data included in this report were derived from the audited financial statements included in the 2022 Annual Report. In the third quarter of 2022, we began to separately present the amount of foreign currency remeasurement gain (loss) on our statements of cash flows. This amount was previously included in changes in other current liabilities. This change did not have any impact on net cash used in operating activities. Corresponding amount in the prior period of the condensed consolidated financial statement has been presented to conform to the current period presentation. The accompanying condensed consolidated financial statements reflect all normal recurring adjustments that are necessary to present fairly the results for the interim periods presented. Interim results are not necessarily indicative of the results for the year ending December 31, 2023. (b) Principles of Consolidation The unaudited condensed consolidated financial statements include the financial statements of the Company. All intercompany transactions and balances are eliminated upon consolidation. (c) Use of Estimates The preparation of the unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates, judgments, and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. Areas where management uses subjective judgment include, but are not limited to, accrual of rebates, recognition of research and development expenses to the appropriate financial reporting period based on the progress of the research and development projects, fair value of share-based compensation expenses, and recoverability of deferred tax assets. These estimates, judgments, and assumptions can affect the reported amounts of assets and liabilities as of the date of the financial statements as well as the reported amounts of revenues and expenses during the periods presented. Actual results could differ from these estimates. (d) Fair Value Measurements Equity investments with readily determinable fair value are measured using level 1 inputs and were $6.9 million and $6.4 million as of March 31, 2023 and December 31, 2022, respectively. The unrealized gains and losses from fair value changes are recognized in other income (expenses), net in the consolidated statements of operations. Financial instruments of the Company primarily include cash, cash equivalents and restricted cash, short-term investments, accounts receivable, notes receivable, prepayments and other current assets, accounts payable, and other current liabilities. As of March 31, 2023 and December 31, 2022, the carrying values of cash and cash equivalents, short-term investments, accounts receivable, notes receivable, prepayments and other current assets, accounts payable, and other current liabilities approximated their fair values due to the short-term maturity of these instruments, and the carrying value of restricted cash approximated its fair value based on the nature of the assessment of the ability to recover these amounts. (e) Recent Accounting Pronouncements There were no standards adopted since the 2022 Annual Report. (f) Significant Accounting Policies For a more complete discussion of the Company’s significant accounting policies, the unaudited condensed consolidated financial statements and notes thereto should be read in conjunction with the 2022 Annual Report.

Cash and Cash Equivalents

Cash and Cash Equivalents	3 Months Ended
	Mar. 31, 2023
Cash and Cash Equivalents [Abstract]
Cash and Cash Equivalents	Cash and Cash Equivalents The following table presents the Company’s cash and cash equivalents ($ in thousands): March 31, 2023 December 31, 2022 Cash at bank and in hand 878,786 1,007,423 Cash equivalents (i) 1,058 1,047 879,844 1,008,470 Denominated in: US$ 836,981 957,824 RMB (ii) 38,278 45,486 Hong Kong dollar (“HK$”) 3,864 4,378 Australian dollar (“A$”) 588 598 Taiwan dollar (“TW$”) 133 184 879,844 1,008,470 (i) Cash equivalents represent short-term and highly liquid investments in a money market fund.

Inventories, Net

Inventories, Net	3 Months Ended
	Mar. 31, 2023
Inventory Disclosure [Abstract]
Inventories, Net	Inventories, Net The Company’s net inventory balance was $38.4 million and $31.6 million as of March 31, 2023 and December 31, 2022, respectively, and mainly consisted of finished goods purchased from Tesaro Inc., now GlaxoSmithKline (“GSK”), for distribution in Hong Kong, from NovoCure Limited (“NovoCure”) for distribution in Hong Kong and mainland China, and from Deciphera Pharmaceuticals, LLC (“Deciphera”) for distribution in Hong Kong, mainland China and Taiwan, as well as finished goods and certain raw materials for ZEJULA and NUZYRA commercialization in mainland China. The following table presents the Company’s inventories, net ($ in thousands): March 31, 2023 December 31, 2022 Finished goods 17,832 12,156 Raw materials 20,521 19,029 Work in Progress 52 436 Inventories, net 38,405 31,621

Property and Equipment, Net

Property and Equipment, Net	3 Months Ended
	Mar. 31, 2023
Property, Plant and Equipment [Abstract]
Property and Equipment, Net	Property and Equipment, Net The following table presents the components of the Company’s property and equipment, net ($ in thousands): March 31, 2023 December 31, 2022 Office equipment 998 977 Electronic equipment 8,315 7,416 Vehicle 205 202 Laboratory equipment 19,491 18,726 Manufacturing equipment 16,763 17,055 Leasehold improvements 11,470 11,300 Construction in progress 25,546 24,251 82,788 79,927 Less: accumulated depreciation (24,479) (22,064) Property and equipment, net 58,309 57,863

Revenue

Revenue	3 Months Ended
	Mar. 31, 2023
Revenue from Contract with Customer [Abstract]
Revenue	Revenue Product Revenue The Company’s product revenue is primarily derived from the sales of ZEJULA, Optune, QINLOCK, and NUZYRA in mainland China and Hong Kong. The table below presents the Company’s product revenue ($ in thousands): Three Months Ended March 31, 2023 2022 Product revenue - gross 71,212 53,310 Less: Rebates and sales returns (8,415) (7,215) Product revenue - net 62,797 46,095 Sales rebates are offered to distributors in mainland China, and the amounts are recorded as a reduction of revenue. Estimated rebates are determined based on contracted rates, sales volumes, and level of distributor inventories. The following table presents the Company’s net revenue by product ($ in thousands): Three Months Ended March 31, 2023 2022 ZEJULA 42,680 29,597 Optune 13,342 12,797 QINLOCK 1,306 2,959 NUZYRA 5,469 742 Product revenue - net 62,797 46,095

Income Tax

Income Tax	3 Months Ended
	Mar. 31, 2023
Income Tax Disclosure [Abstract]
Income Tax	Income Tax No provision for income taxes has been required to be accrued because the Company and all of its subsidiaries are in cumulative loss positions for the periods presented. The Company recorded a full valuation allowance against deferred tax assets of all its consolidated entities because all entities were in a cumulative loss position as of March 31, 2023 and December 31, 2022. No unrecognized tax benefits and related interest and penalties were recorded in the periods presented.

Other Current Liabilities

Other Current Liabilities	3 Months Ended
	Mar. 31, 2023
Other Liabilities Disclosure [Abstract]
Other Current Liabilities	Other Current Liabilities The following table presents the Company’s other current liabilities ($ in thousands): March 31, 2023 December 31, 2022 Payroll 11,472 31,689 Accrued professional service fee 7,148 4,080 Payables for purchase of property and equipment 4,232 5,269 Accrued rebate to distributors 11,536 8,443 Tax payables 13,001 13,283 Others (i) 3,492 4,054 Total 50,881 66,818

Loss Per Share

Loss Per Share	3 Months Ended
	Mar. 31, 2023
Earnings Per Share [Abstract]
Loss Per Share	Loss Per Share The following table presents the computation of the basic and diluted net loss per share ($ in thousands, except share and per share data): Three Months Ended March 31, 2023 2022 Numerator: Net loss attributable to ordinary shareholders (49,144) (82,394) Denominator: Weighted average number of ordinary shares - basic and diluted 961,444,780 955,499,030 Net loss per share - basic and diluted (0.05) (0.09) As a result of the Company’s net loss for the first quarter of 2023 and 2022, share options and non-vested restricted shares outstanding in the respective periods were excluded from the calculation of diluted loss per share as their inclusion would have been anti-dilutive. March 31 2023 2022 Share options 86,242,060 80,514,330 Non-vested restricted shares 32,154,670 9,846,360

Related Party Transactions

Related Party Transactions	3 Months Ended
	Mar. 31, 2023
Related Party Transactions [Abstract]
Related Party Transactions	Related-Party Transactions The Company incurred research and development expenses for product research and development services provided by MEDx (Suzhou) Translational Medicine Co., Ltd (“MEDx”), over which an immediate family member of our Chief Executive Officer and Chairperson of the Board held significant influence. The Company incurred development expenses with MEDx of nil and $0.1 million during the first quarter of 2023 and 2022, respectively.

Share-Based Compensation

Share-Based Compensation	3 Months Ended
	Mar. 31, 2023
Share-Based Payment Arrangement [Abstract]
Share-Based Compensation	Share-Based Compensation In March 2015, the Board of Directors of the Company approved an Equity Incentive Plan (the “2015 Plan”), pursuant to which the Board of Directors could grant options to purchase ordinary shares to management including officers, directors, employees, and individual advisors who rendered services to the Company. In August 2017, in connection with the completion of the Company’s initial public offering on Nasdaq (the “IPO”), the Board of Directors approved the 2017 Equity Incentive Plan (the “2017 Plan”). All equity-based awards subsequent to the IPO would be granted under the 2017 Plan. The 2017 Plan provided for an automatic annual increase to the number of ordinary shares reserved under the 2017 Plan on each January 1st between January 1, 2018 and January 1, 2027 equal to the lesser of 4% of the number of ordinary shares outstanding as of the close of business on the immediately prior December 31st or such number as approved by the Board on or prior to such date each year. On June 22, 2022, at the 2022 Annual General Meeting of Shareholders of the Company, the Company’s shareholders approved the 2022 Equity Incentive Plan (the “2022 Plan”), which was previously approved by the Board of Directors on April 20, 2022, conditioned on and subject to (i) the dual primary listing of the Company on the Main Board of The Stock Exchange of Hong Kong Limited (the “Hong Kong Stock Exchange”) and (ii) the granting of a waiver on Note 1 to Rule 17.03(9) of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited. The Company’s voluntary conversion of its secondary listing status to primary listing status on the Hong Kong Stock Exchange became effective on June 27, 2022, and the waiver was granted to the Company in connection with the primary conversion. As such, the 2022 Plan became effective on June 27, 2022, and the aggregate number of shares that may be delivered in satisfaction of awards under the 2022 Plan is 97,908,743 ordinary shares as of June 22, 2022. No new grants will be made under the 2015 Plan or the 2017 Plan as of the effective date of the 2022 Plan. The options granted have a contractual term of ten years and generally vest ratably over a five-year period, with 20% of the awards vesting on each anniversary of the grant date, subject to continued employment with the Company on the vesting date. The restricted shares granted generally vest ratably over a specified period on the anniversary of the grant date, subject to continued employment/service with the Company on the vesting date. The shares underlying restricted share grants represent shares not yet vested until they have met related consideration or vesting requirements, which are generally continued employment/service to the Company or satisfaction of specified performance conditions. The restricted shares will be released from the restrictions once they vest. Upon termination of the award holders’ service with the Company for any reason, any shares that are outstanding and not yet vested will be immediately forfeited unless otherwise set forth in an agreement between the Company and the award holder. Upon each settlement date of certain share-based awards, shares were withheld to cover the required withholding tax, which was based on the value of a share on the settlement date as determined by the applicable price of the ADSs on the trading day of the applicable settlement date. The remaining shares after the withholding were delivered to the recipient. The amount remitted to the tax authorities for employee tax obligations was reflected as a financing activity on the consolidated statements of cash flows. These shares withheld by the Company as a result of the net settlement were accounted for as treasury stock and considered issued but not outstanding. During the first quarter of 2023, the Company granted 92,640 share options and 266,570 non-vested restricted shares under the 2022 Plan. The share options were granted at an exercise price of $3.99 per share. The share options granted were valued using the Black-Scholes model, and the grant-date fair value was $2.70 per share. The following table presents the stock-based compensation expense that has been reported in the Company’s condensed consolidated statements of operations and comprehensive loss as follows ($ in thousands): Three Months Ended March 31, 2023 2022 Selling, general and administrative 10,063 6,992 Research and development 6,598 5,418 Total 16,661 12,410

License and Collaboration Agree

License and Collaboration Agreements	3 Months Ended
	Mar. 31, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
License and Collaboration Agreements	License and Collaboration AgreementsThe Company may enter into collaboration agreements with third parties to license intellectual property. For a description of the material terms of the Company’s significant license and collaboration agreements, see Note 16 to our 2022 Annual Report. During the first quarter of 2023, the Company did not enter into any new significant license or collaboration agreements, and the Company did not pay or accrue any material upfront or milestone fees for our existing significant license and collaboration agreements.

Other Income (Expenses), Net

Other Income (Expenses), Net	3 Months Ended
	Mar. 31, 2023
Other Income and Expenses [Abstract]
Other Income (Expenses), Net	Other Income (Expenses), Net The following table presents the Company’s other income (expenses), net ($ in thousands): Three Months Ended March 31, 2023 2022 Government grants — 1,576 Gain (loss) on equity investments with readily determinable fair value 441 (6,939) Others miscellaneous gain 793 481 Total 1,234 (4,882)

Restricted Net Assets

Restricted Net Assets	3 Months Ended
	Mar. 31, 2023
Restricted net assets
Restricted Net Assets	Restricted Net Assets The Company’s ability to pay dividends may depend on the Company receiving distributions of funds from its Chinese subsidiaries. Relevant Chinese laws and regulations permit payments of dividends by the Company’s Chinese subsidiaries only out of its retained earnings, if any, as determined in accordance with Chinese accounting standards and regulations. The results of operations reflected in the unaudited condensed consolidated financial statements prepared in accordance with U.S. GAAP differ from those reflected in the statutory financial statements of the Company’s Chinese subsidiaries. In accordance with the Company Law of the People’s Republic of China, a domestic enterprise is required to provide statutory reserves of at least 10% of its annual after-tax profit until such reserve has reached 50% of its respective registered capital based on the enterprise’s Chinese statutory accounts. A domestic enterprise may provide discretionary surplus reserve, at the discretion of the Board of Directors, from the profits determined in accordance with the enterprise’s Chinese statutory accounts. The aforementioned reserves can only be used for specific purposes and are not distributable as cash dividends. The Company’s Chinese subsidiaries were established as domestic enterprises and therefore are subject to the above-mentioned restrictions on distributable profits. No appropriation to statutory reserves was made during the first quarter of 2023 and 2022 because the Chinese subsidiaries had substantial losses during such periods.

Commitments and Contingencies

Commitments and Contingencies	3 Months Ended
	Mar. 31, 2023
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Commitments and Contingencies (a) Purchase Commitments The Company’s commitments related to purchase of property and equipment contracted but not yet reflected in the unaudited condensed consolidated financial statements were $6.0 million as of March 31, 2023 and were expected to be incurred within one year. (b) Legal Proceedings The Company is not currently a party to any material legal proceedings. (c) Indemnifications

Basis of Presentation and Con_2

Basis of Presentation and Consolidation and Significant Accounting Policies (Policies)	3 Months Ended
	Mar. 31, 2023
Accounting Policies [Abstract]
Basis of Presentation	The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”), and applicable rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”), regarding interim financial reporting. Certain information and note disclosures normally included in the financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. As such, the information included in this report should be read in conjunction with the consolidated financial statements and accompanying notes included in the Annual Report on Form 10-K for the year ended December 31, 2022 filed with the SEC on March 1, 2023 (the “2022 Annual Report”). The December 31, 2022 condensed consolidated balance sheet data included in this report were derived from the audited financial statements included in the 2022 Annual Report. In the third quarter of 2022, we began to separately present the amount of foreign currency remeasurement gain (loss) on our statements of cash flows. This amount was previously included in changes in other current liabilities. This change did not have any impact on net cash used in operating activities. Corresponding amount in the prior period of the condensed consolidated financial statement has been presented to conform to the current period presentation. The accompanying condensed consolidated financial statements reflect all normal recurring adjustments that are necessary to present fairly the results for the interim periods presented. Interim results are not necessarily indicative of the results for the year ending December 31, 2023.
Principles of Consolidation	The unaudited condensed consolidated financial statements include the financial statements of the Company. All intercompany transactions and balances are eliminated upon consolidation.
Use of Estimates	The preparation of the unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates, judgments, and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. Areas where management uses subjective judgment include, but are not limited to, accrual of rebates, recognition of research and development expenses to the appropriate financial reporting period based on the progress of the research and development projects, fair value of share-based compensation expenses, and recoverability of deferred tax assets. These estimates, judgments, and assumptions can affect the reported amounts of assets and liabilities as of the date of the financial statements as well as the reported amounts of revenues and expenses during the periods presented. Actual results could differ from these estimates.
Fair Value Measurements	Financial instruments of the Company primarily include cash, cash equivalents and restricted cash, short-term investments, accounts receivable, notes receivable, prepayments and other current assets, accounts payable, and other current liabilities. As of March 31, 2023 and December 31, 2022, the carrying values of cash and cash equivalents, short-term investments, accounts receivable, notes receivable, prepayments and other current assets, accounts payable, and other current liabilities approximated their fair values due to the short-term maturity of these instruments, and the carrying value of restricted cash approximated its fair value based on the nature of the assessment of the ability to recover these amounts.
Recent Accounting Pronouncements	There were no standards adopted since the 2022 Annual Report.
Significant Accounting Policies	For a more complete discussion of the Company’s significant accounting policies, the unaudited condensed consolidated financial statements and notes thereto should be read in conjunction with the 2022 Annual Report.

Cash and Cash Equivalents (Tabl

Cash and Cash Equivalents (Tables)	3 Months Ended
	Mar. 31, 2023
Cash and Cash Equivalents [Abstract]
Schedule of Cash and Cash Equivalents	The following table presents the Company’s cash and cash equivalents ($ in thousands): March 31, 2023 December 31, 2022 Cash at bank and in hand 878,786 1,007,423 Cash equivalents (i) 1,058 1,047 879,844 1,008,470 Denominated in: US$ 836,981 957,824 RMB (ii) 38,278 45,486 Hong Kong dollar (“HK$”) 3,864 4,378 Australian dollar (“A$”) 588 598 Taiwan dollar (“TW$”) 133 184 879,844 1,008,470 (i) Cash equivalents represent short-term and highly liquid investments in a money market fund.

Inventories, Net (Tables)

Inventories, Net (Tables)	3 Months Ended
	Mar. 31, 2023
Inventory Disclosure [Abstract]
Schedule of Inventories, Net	The following table presents the Company’s inventories, net ($ in thousands): March 31, 2023 December 31, 2022 Finished goods 17,832 12,156 Raw materials 20,521 19,029 Work in Progress 52 436 Inventories, net 38,405 31,621

Property and Equipment, Net (Ta

Property and Equipment, Net (Tables)	3 Months Ended
	Mar. 31, 2023
Property, Plant and Equipment [Abstract]
Schedule of Property and Equipment, Net	The following table presents the components of the Company’s property and equipment, net ($ in thousands): March 31, 2023 December 31, 2022 Office equipment 998 977 Electronic equipment 8,315 7,416 Vehicle 205 202 Laboratory equipment 19,491 18,726 Manufacturing equipment 16,763 17,055 Leasehold improvements 11,470 11,300 Construction in progress 25,546 24,251 82,788 79,927 Less: accumulated depreciation (24,479) (22,064) Property and equipment, net 58,309 57,863

Revenue (Tables)

Revenue (Tables)	3 Months Ended
	Mar. 31, 2023
Revenue from Contract with Customer [Abstract]
Schedule of Product Revenue	The table below presents the Company’s product revenue ($ in thousands): Three Months Ended March 31, 2023 2022 Product revenue - gross 71,212 53,310 Less: Rebates and sales returns (8,415) (7,215) Product revenue - net 62,797 46,095
Schedule of Disaggregation of Net Revenue	The following table presents the Company’s net revenue by product ($ in thousands): Three Months Ended March 31, 2023 2022 ZEJULA 42,680 29,597 Optune 13,342 12,797 QINLOCK 1,306 2,959 NUZYRA 5,469 742 Product revenue - net 62,797 46,095

Other Current Liabilities (Tabl

Other Current Liabilities (Tables)	3 Months Ended
	Mar. 31, 2023
Other Liabilities Disclosure [Abstract]
Schedule of Other Current Liabilities	The following table presents the Company’s other current liabilities ($ in thousands): March 31, 2023 December 31, 2022 Payroll 11,472 31,689 Accrued professional service fee 7,148 4,080 Payables for purchase of property and equipment 4,232 5,269 Accrued rebate to distributors 11,536 8,443 Tax payables 13,001 13,283 Others (i) 3,492 4,054 Total 50,881 66,818

Loss Per Share (Tables)

Loss Per Share (Tables)	3 Months Ended
	Mar. 31, 2023
Earnings Per Share [Abstract]
Summary of Basic and Diluted Net Loss Per Share	The following table presents the computation of the basic and diluted net loss per share ($ in thousands, except share and per share data): Three Months Ended March 31, 2023 2022 Numerator: Net loss attributable to ordinary shareholders (49,144) (82,394) Denominator: Weighted average number of ordinary shares - basic and diluted 961,444,780 955,499,030 Net loss per share - basic and diluted (0.05) (0.09)
Summary of Anti-Dilutive Shares Excluded from Calculation of Diluted Loss Per Share	March 31 2023 2022 Share options 86,242,060 80,514,330 Non-vested restricted shares 32,154,670 9,846,360

Share-Based Compensation (Table

Share-Based Compensation (Tables)	3 Months Ended
	Mar. 31, 2023
Share-Based Payment Arrangement [Abstract]
Schedule of Stock-Based Compensation Expense	The following table presents the stock-based compensation expense that has been reported in the Company’s condensed consolidated statements of operations and comprehensive loss as follows ($ in thousands): Three Months Ended March 31, 2023 2022 Selling, general and administrative 10,063 6,992 Research and development 6,598 5,418 Total 16,661 12,410

Other Income (Expenses), Net (T

Other Income (Expenses), Net (Tables)	3 Months Ended
	Mar. 31, 2023
Other Income and Expenses [Abstract]
Schedule of Other Income (Expense), Net	The following table presents the Company’s other income (expenses), net ($ in thousands): Three Months Ended March 31, 2023 2022 Government grants — 1,576 Gain (loss) on equity investments with readily determinable fair value 441 (6,939) Others miscellaneous gain 793 481 Total 1,234 (4,882)

Basis of Presentation and Con_3

Basis of Presentation and Consolidation and Significant Accounting Policies - Additional Information (Details) - USD ($) $ in Millions	Mar. 31, 2023	Dec. 31, 2022
Quoted Prices in Active Markets for Identical Assets (Level 1)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity investments with readily determinable fair value	$ 6.9	$ 6.4

Cash and Cash Equivalents (Deta

Cash and Cash Equivalents (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022	Mar. 31, 2022
Cash And Cash Equivalents [Line Items]
Cash at bank and in hand	$ 878,786	$ 1,007,423
Cash equivalents	1,058	1,047
Cash and cash equivalents	879,844	1,008,470	$ 846,957
US$
Cash And Cash Equivalents [Line Items]
Cash and cash equivalents	836,981	957,824
RMB
Cash And Cash Equivalents [Line Items]
Cash and cash equivalents	38,278	45,486
Hong Kong dollar (“HK$”)
Cash And Cash Equivalents [Line Items]
Cash and cash equivalents	3,864	4,378
Australian dollar (“A$”)
Cash And Cash Equivalents [Line Items]
Cash and cash equivalents	588	598
Taiwan dollar (“TW$”)
Cash And Cash Equivalents [Line Items]
Cash and cash equivalents	$ 133	$ 184

Inventories, Net - Additional I

Inventories, Net - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022
Inventory Disclosure [Abstract]
Net inventory balance	$ 38,405		$ 31,621
Inventory write-down	$ 400	$ 100

Inventories, Net - Summary of i

Inventories, Net - Summary of inventories, net (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Inventory Disclosure [Abstract]
Finished goods	$ 17,832	$ 12,156
Raw materials	20,521	19,029
Work in Progress	52	436
Inventories, net	$ 38,405	$ 31,621

Property and Equipment, Net - S

Property and Equipment, Net - Summary of Property and Equipment, Net (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Property Plant And Equipment
Property and equipment, gross	$ 82,788	$ 79,927
Less: accumulated depreciation	(24,479)	(22,064)
Property and equipment, net	58,309	57,863
Office equipment
Property Plant And Equipment
Property and equipment, gross	998	977
Electronic equipment
Property Plant And Equipment
Property and equipment, gross	8,315	7,416
Vehicle
Property Plant And Equipment
Property and equipment, gross	205	202
Laboratory equipment
Property Plant And Equipment
Property and equipment, gross	19,491	18,726
Manufacturing equipment
Property Plant And Equipment
Property and equipment, gross	16,763	17,055
Leasehold improvements
Property Plant And Equipment
Property and equipment, gross	11,470	11,300
Construction in progress
Property Plant And Equipment
Property and equipment, gross	$ 25,546	$ 24,251

Property and Equipment, Net - A

Property and Equipment, Net - Additional Information (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Property, Plant and Equipment [Abstract]
Depreciation expense	$ 2.5	$ 1.9

Revenue - Summary of Product Re

Revenue - Summary of Product Revenue (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Revenue from Contract with Customer [Abstract]
Product revenue - gross	$ 71,212	$ 53,310
Less: Rebates and sales returns	(8,415)	(7,215)
Product revenue - net	$ 62,797	$ 46,095

Revenue - Disaggregation of Net

Revenue - Disaggregation of Net Revenue by Product (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Disaggregation of Revenue [Line Items]
Product revenue - net	$ 62,797	$ 46,095
ZEJULA
Disaggregation of Revenue [Line Items]
Product revenue - net	42,680	29,597
Optune
Disaggregation of Revenue [Line Items]
Product revenue - net	13,342	12,797
QINLOCK
Disaggregation of Revenue [Line Items]
Product revenue - net	1,306	2,959
NUZYRA
Disaggregation of Revenue [Line Items]
Product revenue - net	$ 5,469	$ 742

Income Tax (Details)

Income Tax (Details) - USD ($)	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022
Income Tax Disclosure [Abstract]
Provision for income taxes	$ 0	$ 0
Unrecognized tax benefits	0		$ 0
Unrecognized tax benefits, interest and penalties	$ 0	$ 0

Other Current Liabilities (Deta

Other Current Liabilities (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Other Liabilities Disclosure [Abstract]
Payroll	$ 11,472	$ 31,689
Accrued professional service fee	7,148	4,080
Payables for purchase of property and equipment	4,232	5,269
Accrued rebate to distributors	11,536	8,443
Tax payables	13,001	13,283
Others	3,492	4,054
Total	$ 50,881	$ 66,818

Loss Per Share - Computation of

Loss Per Share - Computation of Basic and Diluted Net Loss Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Numerator:
Net loss attributable to ordinary shareholders - basic	$ (49,144)	$ (82,394)
Net loss attributable to ordinary shareholders - diluted	$ (49,144)	$ (82,394)
Denominator:
Weighted average number of ordinary shares - basic (in shares)	961,444,780	955,499,030
Weighted average number of ordinary shares - diluted (in shares)	961,444,780	955,499,030
Net loss per share - basic (in dollars per share)	$ (0.05)	$ (0.09)
Net loss per share - diluted (in dollars per share)	$ (0.05)	$ (0.09)

Loss Per Share - Summary of Ant

Loss Per Share - Summary of Anti-Dilutive Shares Excluded from Calculation of Diluted Loss Per Share (Details) - shares	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Share options
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Antidilutive shares excluded from calculation of diluted loss per share	86,242,060	80,514,330
Non-vested restricted shares
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Antidilutive shares excluded from calculation of diluted loss per share	32,154,670	9,846,360

Related Party Transactions (Det

Related Party Transactions (Details) - USD ($)	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Research and development | Limited Liability Company
Related Party Transaction [Line Items]
Transactions between its related party	$ 0	$ 100,000

Share-Based Compensation - Addi

Share-Based Compensation - Additional Information (Details) - USD ($) $ / shares in Units, $ in Millions	1 Months Ended	3 Months Ended
	Aug. 31, 2017	Mar. 31, 2023	Jun. 22, 2022
Share options
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Contractual term		10 years
Vesting period		5 years
Unrecognized share-based compensation expense related to unvested share options granted		$ 90.9
Recognized over a weighted-average period		3 years 4 months 20 days
Non-vested restricted shares
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Unrecognized share-based compensation expense related to unvested restricted shares		$ 117.6
Recognized over a weighted-average period		3 years 4 months 17 days
Tranche one | Share options
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Vesting percentage		20%
Tranche two | Share options
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Vesting percentage		20%
Tranche three | Share options
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Vesting percentage		20%
Tranche four | Share options
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Vesting percentage		20%
Tranche five | Share options
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Vesting percentage		20%
2017 Plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Threshold annual increase to the number of ordinary shares reserved as a percentage of number of ordinary shares outstanding	4%
2022 Plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Shares authorized (in shares)			97,908,743
Options granted (in shares)		92,640
Exercise price of options granted (in dollars per share)		$ 3.99
Weighted-average grant-date fair value of options granted (in dollars per share)		$ 2.70
2022 Plan | Non-vested restricted shares
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Non-option awards granted (in shares)		266,570

Share-Based Compensation - Summ

Share-Based Compensation - Summary of Stock-based Compensation Expense (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Stock-based compensation expense	$ 16,661	$ 12,410
Selling, general and administrative
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Stock-based compensation expense	10,063	6,992
Research and development
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Stock-based compensation expense	$ 6,598	$ 5,418

Other Income (Expenses), Net (D

Other Income (Expenses), Net (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Other Income and Expenses [Abstract]
Government grants	$ 0	$ 1,576
Gain (loss) on equity investments with readily determinable fair value	441	(6,939)
Others miscellaneous gain	793	481
Total	$ 1,234	$ (4,882)

Restricted Net Assets (Details)

Restricted Net Assets (Details) - PRC - USD ($)	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022
Restricted net assets
Statutory reserves	$ 0	$ 0
Restricted amount by subsidiaries	$ 456,000,000		$ 456,000,000

Commitments and Contingencies (

Commitments and Contingencies (Details) $ in Millions	Mar. 31, 2023 USD ($)
Property and Equipment
Loss Contingencies [Line Items]
Purchase obligation to be incurred within one year	$ 6