Ladies and gentlemen, thank you for standing by and welcome to Xylep's third quarter 2026 Financial Results Conference call. At this time, all participants are in the 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.

Hello and welcome, everyone. Today's earnings call will be led by Dr. Samantha Du, Scilabs founder, CEO, and chairperson. She will be joined by Dr. Rafael Amado, President and Head of Global Research and Development, and Dr. Yajing Chen, Chief Financial Officer. Dr. Shan He, our Chief Business Officer, and Dr. Yijie Wang, our operating partner, will also be available to answer questions during the Q&A portion of the call. As a reminder, during today's call, we will 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 to differ materially from what we expect due to a variety of factors, including those discussed in our SEC filings. We will also refer to adjusted loss from operations, which is a non-GAAP financial measure, please refer to our earnings release furnished with the SEC on November 5th, 2026 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.

Thanks, Christine. Good morning and good evening, everyone. We're entering one of the most important periods in Xilab's history. I founded Xilab to discover and develop innovative medicines for patients around the world. We have spent years building the talent, scientific capabilities, and infrastructure to make that possible. With Zosie advancing toward a potential US DLA submission next year, that vision is within our reach. Our first-line asthma data strengthened our confidence that Zosie can become the ADC backbone in small cell lung cancer. We are advancing the ZO-CiO doublet into a global phase III study and building on it through our T-cell engager collaborations with Amgen and BIA. The next two years are pivotal. By year end, we expect three registrational studies underway across small cell lung cancer and neuroendocrine carcinomas. In 2027, we anticipate two registrational readouts and our first potential U.S. DLA submission, positioning us for a U.S. launch as early as 2028. This would be a defining achievement for our company. Our recent $250 million financing further strengthens our ability to deliver on the plan. Our ambition extends well beyond Zosie. Next week, we'll present The first clinical data for CL1503 are internally developed bispecific for atopic dermatitis. We also expect three additional oncology and immunology assets in clinical development next year. Meanwhile, we continued to strengthen our China commercial business. Net product revenue grew 2% sequentially, and our China business remained profitable. This performance is consistent with the stabilization we outlined on our second quarter call. We remain on track with that trajectory and continue to expect a return to year-over-year product revenue growth in 2027. I'm very proud of what our team has accomplished, but our most important achievements are still ahead of us, and I look forward to updating you over the next year. With that, I'll turn the call over to Rafael. Thank you.

Thank you, Samantha. I'll focus on our two lead programs, ZOZI and ZL1503. Let me start with ZOZI, our potential first and best in class ZL1503 targeting ADC. At ESMA, we presented first line small cell lung cancer data from our global phase one study of ZOZI plus atezolizumab. across 33 efficacy-available previously untreated patients at the selected 1.6 milligrams per kilogram dose, the doublet achieved a confirmed objective response rate of 81.8%. Responses were rapid with nearly all observed in the first tumor assessment. We're also seeing encouraging signs of durability. In all 33 patients, the estimated six-month progression-free survival was 81.9%. Among the first 15 patients who had a median follow-up of 10 months, median progression-free survival and median duration of response had not been reached. At the data cutoff, 10 of these 15 patients had not progressed. For context, Chemo IEO has historically delivered a median PFS of roughly five months. What further differentiates ZOCI is its potential to deliver this level of efficacy with substantially improved tolerability. With a 1.6 milligrams per kilogram doublet, Grade 3 or higher Zosie-related adverse events occur in 9.1% of patients. There was a single case of Grade 1 interstitial lung disease, which is consistent with our monotherapy experience. By comparison, Grade 3 or higher treatment-related adverse events occur in roughly 60% or more of patients with chemo I.O. We believe these results are unprecedented in first-line small cell lung cancer in an unselected patient population for platinum responsiveness. Together, these data challenge the conventional view of what an ADC-based regimen could achieve in first-line small cell lung cancer, both in terms of efficacy, durability, and tolerability. On the strength of this data, we're advancing CELSI 1.6 milligrams per kilogram plus immunotherapy doublet into a global randomized SAFE-3 study. We're also building on this backbone with T-cell engagers. The scientific rationale is complementary. CELSI rapidly reduces tumor burden while the T-cell engager provides durable immune mediated . Importantly, CELSI's profile may be particularly advantageous in these combinations as T-cell engagers carry their own toxicity risk. Our global phase 1b study in small cell lung cancer with Amgen is moving rapidly, and our collaboration with BI is also advancing. Beyond first-line disease, our registration of phase 3 DelaBate study is evaluating cells in second-line and later disease, including patients previously treated with telatamab. Contingent on enrolling sufficient post-telatamab in addition to second-line patients An interim analysis in 2027 could support a USBLA submission for accelerated approval. Turning to extrapulmonary neuroendocrine carcinomas, or EPNECs. This is an aggressive disease where there is no established standard of care beyond first-line chemotherapy. Historical response rates are between 10% to 20%. The median overall survival is about six months. We have completed enrollment in our phase 1B slash 2 second line EPNEC study. Tomorrow, at the North American Neuroendocrine Tumor Society Conference, we will present preliminary results showing activity observed across a diversity of EPNEC subtypes. Based on the totality of the clinical data thus far and feedback from FDA, we plan to pursue a potential accelerated approval supported by this single-arm study. We expect final results in 2027 and a potential submission that same year. Now turning to immunology and ZL1503, I internally discovered long-acting IL-13, IL-31 receptor alpha bispecific antibody for atopic dermatitis. ZL1503 is designed to address two major drivers of disease, IL-13 driven inflammation and IL-31 mediated itch. By simultaneously blocking both pathways, ZL1503 has the potential to break the itch, scratch, inflammation cycle, providing more comprehensive disease control with a single biologic. ZL1503 also incorporates YTE modifications that extend its half-life, with the goal of enabling substantially less frequent dosing than currently available biologics. Next week, at the American College of Allergy, Asthma, and Immunology meeting in Phoenix, we will present first in human data from the single ascending dose portion of our global phase one study in healthy volunteers. The SAG study has met its pre-specified endpoints, and we will share results demonstrating its safety profile, pharmacokinetics, immunogenicity, and sustained inhibition of alpha gene inflammatory pathway. Two more datasets follow next year. First, clinical efficacy including age control in patients with moderate to severe atopic dermatitis. And second, initial data from our fully enrolled IV to subcutaneous bridging study. We are planning Phase IIb development in atopic dermatitis while also evaluating the potential for ZL1503 across additional IL-13 and IL-31 mediated diseases. Our next wave of global assets continue to advance. These include ZL6201, our LRRC15-targeted ADC, CL1311, our MAX17-targeting T cell engager, and CL1222, our PD1 IL12 immunocytokine. Lastly, with our China regional pipeline, we continue to progress multiple regulatory and development opportunities, including potential additional filings for refcategemab and the ongoing registration of development of Allegrobarg in thyroid eye disease. And with that, I'll hand it over to Yajing.

Thank you, Rafael. Our financial priorities are clear. Return our China commercial business to growth, maintain a disciplined cost structure, and fund our highest value global program. Our third quarter result showed progress on all three. Total revenue was $108.2 million. Net product revenue increased 2% sequentially, reflecting continued stabilization of our China commercial business. Across our priority brands, the doula held its competitive position despite ongoing volume-based pricing-related dynamics and a competitive pop inhibitory landscape. We regard volumes continue to grow sequentially on new patient starts. and Cox P continue to gain traction ahead of potential NRDO inclusion next year. We expect a return to year-over-year product revenue growth in 2027, driven by continued demand across our priority brands and a new NRDO listing. At the same time, we have maintained strong discipline in managing our operating expenses Both R&D and S&A expenses remained relatively stable compared with the prior year period, reflecting the operational efficiencies and resource optimization initiatives we have implemented across the organization. Our China commercial business remained profitable, providing a strong operating foundation as we continue investing in our global development program. We ended the quarter with a cash position of $659.7 million as of September 30th, 2026. And in October, we raised approximately $250 million in equity at no discount to market, which further provides the financial flexibility to continue investing in the highest value opportunities. In summary, We have a profitable commercial business, a disciplined cost structure, and a balance sheet that supports our global innovative pipeline through its most important milestones. With that, I will open it up for questions.

Thank you.

We will now begin the question and answer session. To ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. Please stand by while we compile the Q&A roster. And our first question comes from the line of Anupam Rama from JP Morgan. Please go ahead, Anupam. Your line is open.

Hey, guys. Thanks so much for taking the question. With the pivotal Delevate study enrollment ongoing here, based on your discussions with regulators, can you give us a sense of how many patients, the amount of follow-up, and if there's an ORR threshold that you need to meet for accelerated approval?

Hi, this is Rafael. Let me take that question. and thanks for it. We did have discussions with the agencies, studies randomized trial with overall survival as the primary endpoint, but there's a possibility that there's accelerated approval based on response rate. So to answer your question, the number of patients in the response rate accelerated approval analysis, which is a formal interim analysis, will include 200 patients. And this will be a mixture of patients that are after platinum progression or after platinum plus tarlatanab. In terms of the length of follow-up, it will be six months after the first scan assessment so that we can assess durability of response. The other criteria is all patients must be approved by the time this analysis is done. and in terms of assumptions, we don't disclose assumptions but with 200 patients, the study is overpowered really for efficacy given that the historical rates are in the 20% range or so and we've disclosed data in the 60% overall response rate in the second line plus. So the reason for the 200 is so that we have a good safety database in addition to efficacy. So hopefully those details, you know, help you understand the interim analysis and the possibility of accelerator approval outside interim analysis.

Thanks so much for taking our question.

Thank you. We will now move to our next question. and our next question comes from Michael E. from UBS. Please go ahead, Michael, your line is open.

Great, thanks. Yeah, so maybe two questions. On the DLL3 opportunity, clearly there is a multi-billion dollar horizon given what Amgen's Tarlatimab is showing this week and yet they're also partnering or collaborating, I should say, with your ADC. Can you talk a little bit about how that collaboration is going and what studies have started or how you envision the two mechanisms perhaps working together such that you could maximize that multi-billion dollar opportunity? So that's question one. And then maybe the second question is presuming that we do have great data next year and we're going to follow the FDA. Do you have any view on whether you would partner, launch yourself? How are you thinking about the different scenarios for your product? Thank you.

Thanks, Michael. I think Rafael will answer your first question, and this is Samantha. I'll address your second one.

Great. Thanks, Mike. With regards to the collaboration with Amgen, Obviously, the results of the DELFI-305 are, I think, practice-changing, and we're pretty excited to see those results. At the same time, we presented data ourselves with the combination with IO, where the PFS hadn't been reached after 10 months. I think their PFS was in the order of about 7.4 months. So there's a possibility of using SOCI with IO, but the big promise, I think, is the combination, because as you know, in the 305s, there were a number of patients, a percentage of patients that couldn't really get maintenance because they progressed. They had less unstable disease on platinum etoposide and IO. So being able to get everybody on maintenance should be superior to that study because the disease control rate using SOCI is pretty high, approaching 100%. So with regards to how things are going, the study is progressing well. We started with Tarlatamab progressors to make sure there was combinability. We started with two different doses. We're pretty confident we can get to the standard dose of 1.6 mixed circuit for combinability. and we look forward to the results of treating patients that are treatment naive with a triplet and then continue to discuss with Amgen options going forward. But we believe that both SOC plus IO and SOC plus TCE plus IO would be options for patients that would move the field beyond even what 305 has done.

Yeah, Michael, in terms of your second question about whether partnering or not, I think our current plan is take JOSI forward ourselves. And that planning is already underway. Our priority today is execution. We're advancing our global program of JOSI aggressively and remain fully committed to deliver the key clinical milestones we outlined. That said, we're also disciplined, as you mentioned, global partners are interested in this asset and will evaluate any option that could accelerate patient access or increase shareholder values. Those evaluations are independent of our development plans, and I don't think they will change the pace or urgency with which we are advancing the program. Thank you, Michael.

Great. Thank you.

Thank you. We will now move to our next question. And our next question comes from Lee Wasik from Cantor Fitzgerald. Please go ahead, Lee. Your line is open.

Hey, good morning and congrats on the progress. Two questions from me. So in terms of Zosie in second line EP and ECS, can you talk a little bit about your alignment with FDA on the AA submission? and what the bar is. And then in terms of the confirmatory study, what would be the design timing of that? For example, do you need to enroll a certain number of patients before you file for AA? And then second, in terms of the TCE combinations, you have two partners here. When will you be in a position to select a go-forward regimen and what goes into that decision? Thanks.

This is Rafael. I'll take both questions. With regards to EPNEC, we will present tomorrow at the next conference in Las Vegas the latest data set of about 60 patients. It's an update from what we presented at AACR. Yes, to give you a sense, there's really no standard second line for extrapulmonary or endocrine carcinoma. And people treat with a variety of regimens. Generally, the response rate is between 10% to 20%. The progression-free survival is in the order of two months. So essentially, the next time the patients are scanned, most of them have progressed. So the virus is really low. We present a response rate approaching 40% and durability between five and six months. This is really being perceived as an advance in the field, particularly given that the tolerability is quite good. in second line plus small cell lung cancer, the treatment-related adverse events in the mid-teens. So those are the discussions we've had with the agency. We have two sets of single alarm data that amount to about 100 patients and depending on how the results read out after waiting for six months after the first scan. then that will determine whether or not we'll be able to file for accelerated approval based on those single-arm studies. As you said, there will need to be a confirmatory study. We have discussed a design with the agency that was accepted. The design will be in front line. We will get into more detail as we get that study going. but we need to get it well underway before the action date. So the study will start early next year so that there's no delay to the potential accelerator approval file that we expect to file next year. With regard to TCE, well, we're working with both companies with Indeltra and Obrextamib, Amgen and BI, respectively. Obviously, Amgen has got a very dominant position in this space, and we will obviously follow the development path of both compounds. My sense is that the combination with Indeltra may move All I can say is that it's a very fruitful collaboration and I described before what the makeup of the Phase 2 study is and we will take the data from there and if it is positive, discuss with our partners how to advance the field with that combination. So that's sort of where we are at the moment. But, you know, our desire is to move to the most active combination with the best benefit-risk as soon as possible.

Thank you. Thank you. And our next question comes from the line of Eagle Nocho-Movics from Citigroup. Please go ahead, Eagle. Your line is open.

Hi, this is Caroline. I'm for Eagle. Thanks for taking your question. We noticed Zyra came in stronger than expected this quarter. Can you help us understand what drove this upside, and has anything changed in your view of the product's longer-term growth outlook? Thanks.

Yajing, can you take that question?

Yeah, can you repeat the first slide? My audio is a little bit choppy here. Which revenue? Sure.

Say New Zyra came in stronger than expected this quarter. Could you help us understand what drove this upside and whether your long-term view has changed?

You mean the, which brand? You mean the revenue? Total revenue?

Sales, yeah.

She's asking about New Zyra sales.

Oh, Nuzaro, sorry, really the choppy, I really apologize. Yes, I think it's really about, you know, this is our strong partnership with our partners. The Nuzaro sales is coming in a little bit stronger. But again, as I said, I think we should be looking at our business, you know, in its totality. We do believe that Nuzaro could be one of the are drivers for our total business going forward. Yes, so we believe this trend will continue.

Okay, thank you. Thank you. And our next question comes from the line of Dana Graybosch from Levering Partners. Please go ahead, Dana. Your line is open.

Hi, thanks for the question. I wonder if you could talk about a frontline strategy should Amgen's Delphi 312 where they're giving Tarla an induction of traditional chemo is successful. If that's great and you have a traditional chemo option in frontline, how do you envision moving forward in frontline with Zosie and Tarla? Thank you.

Yeah, great question. And I think this is really what happens when a drug is being developed in the midst of a field that's evolving. So Mdeltra for some patients will become a frontline drug, either in the maintenance setting or if that study is positive in the induction setting. I think The question will be with how positive that study is, what the tolerability is of full dose chemotherapy plus IO, you know, on these four cycles plus terlatinib. And again, how that compares to the maintenance data and the data with the ADCs. You know, we still see we're pretty... I'm confident that the efficacy that we've seen with IEO is pretty strong. The response rates are incredibly high in the 80% range and long PFS. So I think for, and then we'll have to see what the overall survival is eventually. We're launching that study this year, the frontline doublet study against standard of care. So I think the data will really dictate what physicians and patients will choose. My sense is that we will have to evaluate what the safety of that induction combination is. And the tolerability of SOCI is superior to cardboard double-sided I.O. by a really big margin. So it's a triplet with standard chemotherapy sparing type of approach. It's at least equal or superior to chemotherapy plus Starlatumab IL. And I think it would be a preferred regimen to use SOCI than to use carboetoposide. Carboetoposide is a very old regimen, over 40 years old, and I think the field My sense and the sense of many of the experts that I talked to in this space is that the field will move away from chemotherapy if we can demonstrate that an ADC either with IEO or in combination with TARLA plus IEO by IEO amine checkpoint inhibitor is superior and is safer. So it's a great question, but the data are not yet there. but the hope is that we can simplify the regimen, make it safer and more effective.

All right, thank you. As a reminder, before we move to our next question, please press star 11 if you wish to ask a question now. And our next question comes from the line of Linhai Chao from GomezX. Please go ahead, Linhai, your line is open.

Thanks. This is Ling Hai from GoMEN. Thanks for the opportunity. So regarding our sales growth outlook in 2027, can you bridge the key drivers required to deliver the anticipated resumed growth in 2027, including the excess expansion like NRDO coverage, the new launches, and the stabilization of the matured portfolio? Thanks.

Thank you for the questions. I'll take this. Yes, we remain confident in our 2027 guidance on meaningful growth. The key drivers are really a couple of fronts. The first one are to, in anticipation of NRDL, there will be volume expansion coming from key brands like VivGuard, SubQ, as well as CarXT, and also our main core brands, Zedula has shown it's regained its important patient shares. We believe that business will return to growth next year. And also Zac Duro, that as our supply constraint is relieved, we will see a meaningful growth as well. So all in all, we are quite confident that we will be able to drive a 2027 meaningful revenue growth. In addition, and We believe the positive environment overall in China now favors an innovation portfolio, which I have. And we believe that in combination with our discipline and the focused execution will allow us to really provide a predictable and consistent growth in 2027. Thank you.

Thank you. I am showing no further questions. I'll now turn the conference back to Dr. Samantha Du for her closing comments.

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 fourth quarter of 2026. Operator, you may now disconnect the call. Thank you. Thank you for your participation in today's conference. This does conclude the program.

You may now disconnect your lines.