zlab-20260331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

____________________

FORM 10-Q

____________________

(Mark One)


x			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2026


o			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______ to ______

Commission File Number: 001-38205

____________________

ZAI LAB LIMITED

(Exact Name of Registrant as Specified in its Charter)

____________________


Cayman Islands			98-1144595
(State or Other Jurisdiction of Incorporation or Organization)			(I.R.S. Employer Identification No.)

899 Halei Road Building B, Pudong Shanghai China			201203
314 Main Street 4th Floor, Suite 100 Cambridge, MA, USA			02142
(Address of Principal Executive Offices)			(Zip Code)

+86 216163 2588

+1 857 706 2604

(Registrant’s Telephone Number, Including Area Code)

____________________

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading

Symbol(s)

Name of each exchange

on which registered

American Depositary Shares, each representing 10 Ordinary Shares, par value $0.000006 per share

ZLAB

The Nasdaq Global Market

Ordinary Shares, par value $0.000006 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.

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of April 30, 2026, 1,123,548,580 ordinary shares of the registrant, par value $0.000006 per share, were outstanding, of which 340,336,080 ordinary shares were held in the form of American Depositary Shares.

Table of Contents

Zai Lab Limited

Quarterly Report on Form 10-Q

For the First Quarter of 2026


		Page
PART I.	FINANCIAL INFORMATION	1
Item 1.	Financial Statements (Unaudited)	2
	Condensed Consolidated Balance Sheets as of March 31 , 202 6 and December 31, 2 025	2
	Condensed Consolidated Statements of Operations for the Three Mo n ths Ended March 3 1 , 202 6 and 20 25	3
	Condensed Consolidated Statements of Comprehensive Loss for the Three Months Ended March 31 , 202 6 and 202 5	4
	Condensed Consolidated Statements of Shareholders’ Equity for the Three Months Ended March 31 , 202 6 and 20 25	5
	Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31 , 202 6 and 20 25	6
	Notes to the Unaudited Condensed Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	17
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	26
Item 4.	Controls and Procedures	28
PART II.	OTHER INFORMATION	29
Item 1.	Legal Proceedings	29
Item 1A.	Risk Factors	29
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	29
Item 3.	Defaults upon Senior Securities	29
Item 4.	Mine Safety Disclosures	29
Item 5.	Other Information	29
Item 6.	Exhibits	30
Signatures		31

SPECIAL NOTES REGARDING THE COMPANY

Forward-Looking Statements

This report contains certain forward-looking statements, including statements relating to our strategy and plans; potential of and expectations for our business, commercial products, and pipeline programs; the market for our commercial and pipeline products; capital allocation and investment strategy; clinical development programs and related clinical trials; clinical trial data, data readouts, and presentations; risks and uncertainties associated with drug development and commercialization; regulatory discussions, submissions, filings, and approvals and the timing thereof; the potential benefits, safety, and efficacy of our products and product candidates and those of our collaboration partners; the anticipated benefits and potential of investments, collaborations, and business development activities; our profitability and timeline to profitability; and our future financial and operating results. All statements, other than statements of historical fact, included in this report are forward-looking statements, and can be identified by words such as “aim,” “anticipate,” “believe,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “forecast,” “goal,” “intend,” “may,” “plan,” “possible,” “potential,” “predict,” “project,” “seek,” “should,” “target,” “will,” “would,” or the negative of these terms or similar expressions. Such statements constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not guarantees or assurances of future performance. Forward-looking statements are based on our expectations and assumptions as of the date of this report and are subject to inherent uncertainties, risks, and changes in circumstances that may differ materially from those contemplated by the forward-looking statements. We may not actually achieve the plans, carry out the intentions, or meet the expectations or projections disclosed in our forward-looking statements, and you should not place undue reliance on these forward-looking statements. Actual results may differ materially from those indicated by such forward-looking statements as a result of various important factors, including but not limited to the following:

• Our ability to successfully commercialize and generate revenue from our approved products;

• Our ability to obtain funding for our operations and business initiatives;

• The results of our clinical and pre-clinical development of our product candidates;

• The content and timing of decisions made by the relevant regulatory authorities regarding regulatory approvals of our product candidates;

• Any inability of third parties on whom we rely, such as our licensors, CMOs, and others that supply certain of our products and product candidates; CROs that conduct or support some of our pre-clinical and clinical trials; and distributors that sell our commercial products, to successfully carry out their contractual duties or meet expected deadlines;

• Any issues that our Chinese manufacturing facilities may have with operating in conformity with established GMPs and international best practices, and with passing FDA, NMPA, and EMA inspections;

• Any inability to obtain or maintain sufficient patent protection for our products and product candidates;

• Changes in U.S. and China trade policies and relations, as well as relations with other countries, and/or changes in laws, regulations, and/or sanctions;

• Actions the Chinese government may take to intervene in or influence our operations;

• Economic, political, and social conditions in mainland China as well as governmental policies;

• Significant business disruptions caused by events or developments outside of our control, such as pandemics, international war or conflict, natural disasters or extreme weather events, and other geopolitical events;

• Uncertainties in the Chinese legal system, including with respect to the anti-corruption enforcement efforts in mainland China and those addressing espionage, protection of and transfer restrictions on data, including personal information, data processing and security, and cybersecurity, and other future laws and regulations or amendments to such laws and regulations;

• Approval, filing, or procedural requirements imposed by the China Securities Regulatory Commission or other Chinese regulatory authorities in connection with issuing securities to foreign investors under Chinese law;

• Any violation or liability under the U.S. Foreign Corrupt Practices Act or Chinese anti-corruption, anti-bribery, and anti-fraud laws;

• Variations in currency exchange rates and restrictions on currency exchange;

• Limitations on the ability of our Chinese subsidiaries to make payments to us;

• Chinese requirements on the ability of residents in mainland China to establish offshore special purpose companies;

• Chinese regulations regarding acquisitions of companies based in mainland China by foreign investors;

• Expiration of, or changes to, financial incentives or discretionary policies granted by local governments in mainland China;

• Restrictions or limitations on the ability of overseas regulators to conduct investigations or collect evidence within mainland China;

• Unfavorable tax consequences to us and our non-Chinese shareholders or ADS holders if we were to be classified as a Chinese resident enterprise for Chinese income tax purposes;

• Failure to comply with applicable Chinese, U.S., and Hong Kong regulations that could lead to government enforcement actions, fines, other legal or administrative sanctions, and/or harm to our business or reputation;

• Delays or obstacles for closing transactions, such as review by the CFIUS in our investments; and

• Any inability to renew our current leases on desirable terms or otherwise locate desirable alternatives for our leased properties.

These factors should not be construed as exhaustive and should be read with the other cautionary statements and information in our Annual Report on Form 10-K for the year ended December 31, 2025 (the “2025 Annual Report”), our Quarterly Reports on Form 10-Q, and our other filings with the U.S. Securities and Exchange Commission. Forward-looking statements are based on our management’s beliefs and assumptions and information currently available to our management. These statements, like all statements in this report, speak only as of their date. We anticipate that subsequent events and developments will cause our expectations and assumptions to change, and we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as may be required by law. These forward-looking statements should not be relied upon as representing our views as of any date subsequent to the date of this report.

Usage of Terms

Throughout this report, we use certain acronyms and terms that are defined in the Glossary of our 2025 Annual Report. References to “Zai Lab,” the “Company,” “we,” “us,” and “our” refer to Zai Lab Limited, a holding company, and its subsidiaries, on a consolidated basis; and references to “Zai Lab Limited” refer to Zai Lab Limited, a holding company. Zai Lab Limited is the entity in which investors hold their interest.

Our operating subsidiaries consist of Zai Lab (Hong Kong) Limited, domiciled in Hong Kong; Zai Auto Immune (Hong Kong) Limited, domiciled in Hong Kong; Zai Anti Infectives (Hong Kong) Limited, domiciled in Hong Kong; Zai Lab (Shanghai) Co., Ltd., domiciled in mainland China; Zai Lab International Trading (Shanghai) Co., Ltd., domiciled in mainland China; Zai Lab (Suzhou) Co., Ltd., domiciled in mainland China; Zai Biopharmaceutical (Suzhou) Co., Ltd., domiciled in mainland China; Zai Lab Trading (Suzhou) Co., Ltd., domiciled in mainland China; Zai Lab (Zhejiang) Co., Ltd., domiciled in mainland China; Zai Lab (Taiwan) Limited, domiciled in Taiwan; Zai Lab (AUST) Pty. Ltd., domiciled in Australia; and Zai Lab (US) LLC, domiciled in the United States.

We own various trademarks, including various forms of the Zai Lab brand (in English and Chinese), as well as several domain names that incorporate such trademarks. Trademarks and trade names of other companies appearing in this report are the property of their respective holders. Solely for convenience, some of the trademarks and trade names in this report are referred to without the ® and ™ symbols, but such references should not be construed as any indicator that their respective owners will not assert, to the fullest extent under applicable law, their rights thereto. We do not intend our use or display of other companies’ trademarks and trade names to imply a relationship with, or endorsement or sponsorship of, any other company.

PART I – FINANCIAL INFORMATION

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the unaudited condensed consolidated financial statements and the accompanying notes included in this report and the audited consolidated financial information and the accompanying notes included in our 2025 Annual Report.

Item 1. Financial Statements.

Zai Lab Limited

Unaudited Condensed Consolidated Balance Sheets

(in thousands of U.S. dollars (“$”), except for number of shares and per share data)


	Notes	March 31, 2026	December 31, 2025

Assets
Current assets
Cash and cash equivalents	3	651,316	679,573
Restricted cash, current		100,000	100,000
Short-term investments		10,000	10,000
Accounts receivable (net of allowance for credit losses of $16 and $31 as of March 31, 2026 and December 31, 2025, respectively)		54,069	106,116
Notes receivable		7,929	12,169
Inventories, net	4	85,961	74,745
Prepayments and other current assets		35,454	36,683
Total current assets		944,729	1,019,286
Restricted cash, non-current		1,117	1,116


Property and equipment, net	5	47,067	47,389
Operating lease right-of-use assets		17,585	19,152
Land use rights, net		2,868	2,853
Intangible assets, net	6	75,759	76,144
Deferred tax assets		3,444	3,390
Other non-current assets		3,168	3,054
Total assets		1,095,737	1,172,384
Liabilities and shareholders’ equity
Current liabilities
Accounts payable		126,169	141,608
Current operating lease liabilities		5,983	6,344
Short-term debt	10	213,819	204,530
Other current liabilities	11	47,011	63,684
Total current liabilities		392,982	416,166
Deferred income		28,627	27,333
Non-current operating lease liabilities		12,107	13,385
Other non-current liabilities		40	—
Total liabilities		433,756	456,884
Commitments and contingencies (Note 17)
Shareholders’ equity
Ordinary shares (par value of $0.000006 per share; 5,000,000,000 shares authorized; 1,118,835,190 and 1,113,822,550 shares issued as of March 31, 2026 and December 31, 2025, respectively; 1,110,232,620 and 1,106,389,340 shares outstanding as of March 31, 2026 and December 31, 2025, respectively)		7	7
Additional paid-in capital		3,357,826	3,343,469
Accumulated deficit		(2,679,636)	(2,628,620)
Accumulated other comprehensive income		15,105	29,697
Treasury Stock (at cost, 8,602,570 and 7,433,210 shares as of March 31, 2026 and December 31, 2025, respectively)		(31,321)	(29,053)
Total shareholders’ equity		661,981	715,500
Total liabilities and shareholders’ equity		1,095,737	1,172,384

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Zai Lab Limited

Unaudited Condensed Consolidated Statements of Operations

(in thousands of $, except for number of shares and per share data)


		Three Months Ended March 31,
	Notes	2026	2025
Revenues
Product revenue, net	7	95,556	105,650
Collaboration revenue	7	4,055	837
Total revenues		99,611	106,487
Expenses
Cost of product revenue		(38,315)	(38,452)
Cost of collaboration revenue		(20)	(195)
Research and development		(65,591)	(60,729)
Selling, general, and administrative		(65,070)	(63,422)

Loss from operations		(69,385)	(56,311)
Interest income		6,447	8,606
Interest expenses		(1,637)	(1,187)
Foreign currency gains		14,837	651
Other income (expense), net	15	162	(197)
Loss before income tax		(49,576)	(48,438)
Income tax expense	8	(1,440)	—
Net loss		(51,016)	(48,438)
Loss per share - basic and diluted	9	(0.05)	(0.04)
Weighted-average shares used in calculating net loss per ordinary share - basic and diluted		1,107,390,590	1,080,825,300

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Zai Lab Limited

Unaudited Condensed Consolidated Statements of Comprehensive Loss

(in thousands of $)


	Three Months Ended March 31,
	2026	2025
Net loss	(51,016)	(48,438)
Other comprehensive loss, net of tax of nil:
Foreign currency translation adjustments	(14,592)	(1,212)
Comprehensive loss	(65,608)	(49,650)

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Zai Lab Limited

Unaudited Condensed Consolidated Statements of Shareholders’ Equity

(in thousands of $, except for number of shares)


	Ordinary Shares		Additional paid in capital	Accumulated deficit	Accumulated other comprehensive income	Treasury Stock		Total
	Number of Shares	Amount				Shares	Amount
Balance at December 31, 2025	1,113,822,550	7	3,343,469	(2,628,620)	29,697	(7,433,210)	(29,053)	715,500
Issuance of ordinary shares upon vesting of restricted shares	371,630	0	0	—	—	—	—	—
Exercise of share options	4,641,010	0	833	—	—	—	—	833

Receipt of shares netted to satisfy tax withholding obligations related to share-based compensation	—	—	—	—	—	(1,169,360)	(2,268)	(2,268)
Share-based compensation	—	—	13,524	—	—	—	—	13,524
Net loss	—	—	—	(51,016)	—	—	—	(51,016)
Foreign currency translation	—	—	—	—	(14,592)	—	—	(14,592)
Balance at March 31, 2026	1,118,835,190	7	3,357,826	(2,679,636)	15,105	(8,602,570)	(31,321)	661,981


	Ordinary Shares		Additional paid in capital	Accumulated deficit	Accumulated other comprehensive income	Treasury Stock		Total
	Number of Shares	Amount				Shares	Amount

Balance at December 31, 2024	1,082,614,740	7	3,264,295	(2,453,083)	50,515	(4,912,200)	(20,836)	840,898
Issuance of ordinary shares upon vesting of restricted shares	137,540	0	0	—	—	—	—	—
Exercise of share options	6,324,120	0	3,733	—	—	—	—	3,733
Issuance cost of the follow-on public offering	—	—	(28)	—	—	—	—	(28)
Share-based compensation	—	—	15,800	—	—	—	—	15,800
Net loss	—	—	—	(48,438)	—	—	—	(48,438)
Foreign currency translation	—	—	—	—	(1,212)	—	—	(1,212)
Balance at March 31, 2025	1,089,076,400	7	3,283,800	(2,501,521)	49,303	(4,912,200)	(20,836)	810,753

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. “0” in above table means less than 1,000 dollars.

Zai Lab Limited

Unaudited Condensed Consolidated Statements of Cash Flows

(in thousands of $)


	Three Months Ended March 31,
	2026	2025
Cash flows from operating activities
Net loss	(51,016)	(48,438)
Adjustments to reconcile net loss to net cash used in operating activities:
Allowance for credit losses	(15)	(3)
Inventory write-down	188	27
Depreciation and amortization expenses	3,944	3,458
Amortization of deferred income	(1,393)	(1,331)
Share-based compensation	13,524	15,800
Loss from fair value changes of equity investment with readily determinable fair value	—	1,912

Loss on disposal of property and equipment	18	—
Noncash lease expenses	1,810	2,466


Foreign currency remeasurement impact	(14,837)	(651)
Changes in operating assets and liabilities:
Accounts receivable	53,268	8,737
Notes receivable	4,410	(6,885)
Inventories	(11,208)	(13,198)
Prepayments and other current assets	1,518	(1,601)

Other non-current assets	(78)	1,401

Accounts payable	4,261	2,720
Other current liabilities	(17,638)	(23,275)
Operating lease liabilities	(1,061)	(2,827)
Deferred income	2,353	(11)
Other non-current liabilities	40	—
Net cash used in operating activities	(11,912)	(61,699)
Cash flows from investing activities

Proceeds from maturity of short-term investment	—	330,000

Purchases of property and equipment	(1,195)	(1,534)
Proceeds from the sale of property and equipment	2	—
Acquisition of intangible assets	(21,095)	(2,333)


Net cash (used in) provided by investing activities	(22,288)	326,133
Cash flows from financing activities
Proceeds from short-term debt	112,510	101,890
Repayment of short-term bank borrowings	(105,500)	(60,904)

Proceeds from exercises of stock options	833	3,009

Payments of public offering costs	—	(854)
Employee taxes paid related to net share settlement of equity awards	(2,270)	—

Net cash provided by financing activities	5,573	43,141
Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash	371	20
Net (decrease) increase in cash, cash equivalents and restricted cash	(28,256)	307,595
Cash, cash equivalents and restricted cash - beginning of period	780,689	550,781
Cash, cash equivalents and restricted cash - end of period	752,433	858,376
Supplemental disclosure on non-cash investing and financing activities
Payables for purchase of property and equipment	629	2,645
Payables for acquisition of intangible assets	895	2,075
Payables for public offering costs	168	168


Receivable from sales of equity investments	—	1,203
Receivables for stock option exercise under equity incentive plans	—	794

Supplemental disclosure of cash flow information
Cash paid for interest	1,399	1,101

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Zai Lab Limited

Notes to the unaudited condensed consolidated financial statements

1. 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 that address medical conditions with significant unmet needs in the areas of oncology, immunology, neuroscience, and infectious disease.

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.

2. 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 U.S. generally accepted accounting principles (“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, 2025 (the “2025 Annual Report”). The December 31, 2025 condensed consolidated balance sheet data included in this report were derived from the audited financial statements in the 2025 Annual Report.

The accompanying unaudited 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, 2026.

(b) Principles of Consolidation

The unaudited condensed consolidated financial statements include the accounts of Zai Lab Limited and its subsidiaries, which are wholly owned. All intercompany transactions and balances are eliminated upon consolidation.

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 based on the Company’s estimates of the actual services performed by CROs and CMOs, fair value of share-based compensation expenses, recoverability of deferred tax assets, and useful life of intangible assets for commercial products. 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

Financial instruments of the Company primarily include cash and cash equivalents, current restricted cash, short-term investments, accounts receivable, notes receivable, prepayments and other current assets, non-current restricted cash, accounts payable, short-term debt, and other current liabilities. As of March 31, 2026 and December 31, 2025, the carrying values of cash and cash equivalents, current restricted cash, short-term investments, accounts receivable, prepayments and

Zai Lab Limited

Notes to the unaudited condensed consolidated financial statements

other current assets, accounts payable, short-term debt, and other current liabilities approximated their fair value due to the short-term maturity of these instruments, and the carrying value of notes receivable and non-current restricted cash approximated their fair value based on the assessment of the ability to recover these amounts.

(e) Recent Accounting Pronouncements

Recently Issued Accounting Pronouncements Not Yet Adopted

In November 2024, the FASB issued ASU No. 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. This ASU requires disclosure in the notes to the financial statements of specified information about certain costs and expenses. This ASU will be effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. This ASU will result in the required additional disclosures being included in the notes to consolidated financial statements, once adopted. The Company is currently evaluating the impact of this ASU and expects to adopt it for the year ending December 31, 2027.

For additional information on the Company’s significant accounting policies, refer to the notes to the consolidated financial statements in the 2025 Annual Report.

3. Cash and Cash Equivalents

The following table presents the Company’s cash and cash equivalents ($ in thousands):


	March 31, 2026	December 31, 2025

Cash	650,092	678,358
Cash equivalents (i)	1,224	1,215
	651,316	679,573
Denominated in:
US$	631,882	651,196
Renminbi (“RMB”) (ii)	15,757	25,358
Hong Kong dollar (“HK$”)	2,887	2,020
Australian dollar (“A$”)	547	538
Taiwan dollar (“TW$”)	243	461
	651,316	679,573

(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 mainland 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 Chinese government.

Zai Lab Limited

Notes to the unaudited condensed consolidated financial statements

4. Inventories, Net

The following table presents the Company’s inventories, net ($ in thousands):


	March 31, 2026	December 31, 2025

Finished goods	53,269	45,848
Raw materials	24,254	23,106
Work in progress	8,438	5,791
Inventories, net	85,961	74,745

The Company writes down inventory for any excess or obsolete inventory or when the Company believes that the net realizable value of inventory is less than the carrying value. The Company recorded write-downs in inventory, which were included in cost of product revenue, of $0.2 million and insignificant amounts in the first quarter of 2026 and 2025, respectively.

5. Property and Equipment, Net

The following table presents the components of the Company’s property and equipment, net ($ in thousands):


	March 31, 2026	December 31, 2025

Office equipment	1,206	1,201
Electronic equipment	11,964	10,964
Vehicle	203	200
Laboratory equipment	20,207	20,040
Manufacturing equipment	18,231	17,948
Leasehold improvements	14,236	14,049
Building	24,985	24,596
Construction in progress	681	554
	91,713	89,552
Less: accumulated depreciation	(44,646)	(42,163)
Property and equipment, net	47,067	47,389

Depreciation expense was $2.3 million and $2.0 million in the first quarter of 2026 and 2025, respectively.

6. Intangible Assets, Net

The following table presents the components of the Company’s intangible assets, net ($ in thousands):


	March 31, 2026			December 31, 2025
	Gross Carrying Amount	Accumulated Amortization	Net Carrying Value	Gross Carrying Amount	Accumulated Amortization	Net Carrying Value
Finite-lived intangible assets
Commercial products	84,562	(9,678)	74,884	83,203	(8,056)	75,147
Software	4,523	(3,648)	875	4,461	(3,464)	997
Total	89,085	(13,326)	75,759	87,664	(11,520)	76,144

Intangible assets for commercial products include capitalized post-approval milestone fees and acquired commercial manufacturing know-how and related development costs. The Company is amortizing intangible assets for commercial

Zai Lab Limited

Notes to the unaudited condensed consolidated financial statements

products as cost of product revenue over the estimated remaining useful life of the related products. Intangible assets for externally purchased software are amortized over three to five years on a straight-line basis.

Amortization expense was $1.6 million and $1.5 million in the first quarter of 2026 and 2025, respectively. The weighted-average remaining amortization period for intangible assets for commercial products and software was 8.7 years and 2.2 years, respectively.

7. Revenues

Product Revenue, Net

The Company’s product revenue is derived from the sales of its commercial products in Greater China. The table below presents the Company’s gross and net product revenue ($ in thousands):


	Three Months Ended March 31,
	2026	2025

Product revenue - gross	102,254	112,333
Less: Rebates and sales returns	(6,698)	(6,683)
Product revenue - net	95,556	105,650

Sales rebates are offered to distributors in mainland China, and the amounts are recorded as a reduction of product 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 commercial program ($ in thousands):


	Three Months Ended March 31,
	2026	2025

ZEJULA	29,967	49,529
VYVGART / VYVGART Hytrulo	17,551	18,105
NUZYRA	16,262	15,118
OPTUNE	12,070	11,363
QINLOCK	8,985	8,509
XACDURO	8,572	1,117
AUGTYRO	1,792	1,626
Other (i)	357	283
Product revenue - net	95,556	105,650

(i)Other includes product candidates sold in patient programs prior to commercialization.

Collaboration Revenue

Collaboration revenue was $4.1 million and $0.8 million in the first quarter of 2026 and 2025, respectively, and mainly related to a regional license and collaboration arrangement and promotional activities in mainland China.

8. Income Tax

Income tax expense was $1.4 million for the first quarter of 2026 attributable to taxable income in certain Chinese entities. Income tax expense was nil for the first quarter of 2025 as the Company’s subsidiaries were in cumulative loss positions.

Zai Lab Limited

Notes to the unaudited condensed consolidated financial statements

9. 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,
	2026	2025

Numerator:
Net loss	(51,016)	(48,438)
Denominator:
Weighted-average number of ordinary shares - basic and diluted	1,107,390,590	1,080,825,300
Net loss per share - basic and diluted	(0.05)	(0.04)

As a result of the Company’s net loss in the first quarter of 2026 and 2025, 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,
	2026	2025
Share options	81,326,250	98,164,510
Non-vested restricted shares	26,423,180	32,537,760

10. Borrowings

The Company has debt arrangements with the Bank of China, SPD Bank, CMB, BOCOM, Ningbo Bank, and CIB to support its working capital needs in mainland China. The following table presents the Company’s short-term debt and weighted-average interest rate per annum ($ in thousands):


	March 31, 2026			December 31, 2025
Bank of China Working Capital Loans	2.20	%	69,298	2.36	%	69,427
SPD Bank Working Capital Loans	2.50	%	14,452	2.80	%	28,454
China Merchants Bank Working Capital Loans	2.64	%	57,809	2.65	%	42,683
Bank of Communications Working Capital Loans	2.50	%	43,356	2.75	%	42,682
Ningbo Bank Discounted Bills	1.60	%	—	1.60	%	7,057
Industrial Bank Working Capital Loans	2.55	%	28,904	2.60	%	14,227
Total short-term debt	2.45	%	213,819	2.55	%	204,530

Bank of China Working Capital Loan Facility

The Company has an uncommitted facility letter with the Bank of China (Hong Kong) Limited (“BOC HK”) pursuant to which BOC HK will provide standby letters of credit in favor of the Bank of China Pudong Development Zone Branch (“BOC Pudong Branch”) for loans of up to $100.0 million, which are or may become payable by the Company’s wholly-owned subsidiary, Zai Lab (Shanghai) Co., Ltd. (“Zai Lab Shanghai”). BOC HK and BOC Pudong Branch are collectively referred to as Bank of China. In accordance with this agreement, the Company also maintained restricted deposits of $100.0 million, which are presented as restricted cash-current on the unaudited condensed consolidated balance sheet, to secure the standby letters of credit. Each working capital loan has a one-year term and is subject to a floating interest rate, which is subject to adjustment every six months.

Zai Lab Limited

Notes to the unaudited condensed consolidated financial statements

SPD Bank Working Capital Loan Facility

In February 2024, the Company entered into a maximum-amount guarantee contract with the Shanghai Pudong Development Bank Co., Ltd. Zhangjiang Hi-Tech Park Sub-Branch (“SPD Bank”) pursuant to which the Company will guarantee working capital loans of up to RMB300.0 million (approximately $42.0 million) from SPD Bank to Zai Lab Shanghai over a three-year period. Each working capital loan has a one-year term and is subject to a fixed interest rate.

China Merchants Bank Working Capital Loan Facility

In August 2025, the Company issued a maximum-amount irrevocable letter of guarantee to China Merchants Bank Co., Ltd., Shanghai Branch (“CMB”) pursuant to which the Company will guarantee working capital loans of up to RMB500.0 million (approximately $69.6 million) from CMB to Zai Lab Shanghai, and Zai Lab Shanghai entered into a Credit Agreement with CMB with respect to the RMB500.0 million facility. The guarantee and credit facility include the outstanding working capital loans with CMB. The credit facility will be available for two years. Each working capital loan has a one-year term and is subject to a floating interest rate, which is subject to adjustment every three months.

Bank of Communications Working Capital Loan Facility

In January 2025, the Company entered into a guarantee contract with Bank of Communications Co., Ltd. Shanghai Zhangjiang Sub-Branch (“BOCOM”) pursuant to which the Company will guarantee working capital loans from BOCOM to Zai Lab Shanghai, and Zai Lab Shanghai entered into a working capital loan contract with BOCOM with respect to a revolving credit facility of up to RMB300.0 million (approximately $41.1 million). The credit facility expired in September 2025. In February 2026, the Company entered into a new revolving credit facility with BOCOM that will expire in March 2027, which replaced its previous RMB300.0 million (approximately $41.1 million) credit facility. The Company entered into a new guarantee contract with BOCOM pursuant to which the Company will provide a maximum-amount guarantee of RMB330.0 million (approximately $47.9 million) for working capital loans of up to RMB300.0 million (approximately $43.6 million) from BOCOM to Zai Lab Shanghai, and Zai Lab Shanghai entered into a working capital loan contract with BOCOM with respect to the RMB300.0 million facility. The new credit facility will be available until February 2, 2029. Each working capital loan has a one-year term and is subject to a floating interest rate, which is subject to adjustment every three months.

Ningbo Bank Working Capital Loan Facility

In February 2024, the Company’s wholly-owned subsidiary, Zai Lab (Suzhou) Co., Ltd. (“Zai Lab Suzhou”), entered into a maximum credit contract with Bank of Ningbo Co., Ltd. Suzhou Sub-branch (“Ningbo Bank”) as well as an Electronic Commercial Draft Discounting Master Agreement and Online Working Capital Loan Master Agreement (collectively, the “Ningbo Bank Agreements”). The Ningbo Bank Agreements permit Zai Lab Suzhou to utilize, including through discounting or working capital loan agreements and subject to the terms and conditions in related master agreements, up to RMB230.3 million (approximately $32.4 million), of which Zai Lab Suzhou is authorized to utilize up to RMB160.0 million (approximately $22.5 million). The cash proceeds from the discounting arrangement were classified as short-term debt. Each discounted bill has a 6-month term.

Industrial Bank Working Capital Loans

On October 13, 2025, the Company entered into a maximum amount guarantee contract with Industrial Bank Co., Ltd., Shanghai Gubei Branch (“CIB”) pursuant to which the Company will guarantee working capital loans of up to RMB300.0 million (approximately $42.1 million) from CIB to its wholly-owned subsidiary, Zai Lab Shanghai, and Zai Lab Shanghai entered into a credit line contract with CIB with respect to the RMB300.0 million revolving credit facility. The credit facility will be available until May 5, 2026. Each working capital loan has a one-year term and is subject to a fixed interest rate.

Zai Lab Limited

Notes to the unaudited condensed consolidated financial statements

11. Other Current Liabilities

The following table presents the Company’s other current liabilities ($ in thousands):

SEC Form 10-Q filed by Zai Lab Limited