Form 10-Q

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM

10-Q

(Mark One)

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

For the quarterly period ended March 31, 2021

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

For the transition period from

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.)


4560 Jinke Road Bldg. 1, Fourth Floor Pudong Shanghai, China		201210
(Address of principal executive offices)		(Zip Code)

+86 21 6163 2588

(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 1 Ordinary Share, par value $0.00006 per share	ZLAB	The Nasdaq Global Market

Ordinary Shares, par value $0.00006 per share*	9688	The Stock Exchange of Hong Kong Limited

*	Included in connection with the registration of the American Depositary Shares with the Securities and Exchange Commission. The ordinary shares are not registered or listed for trading in the United States but are listed for trading on The Stock Exchange of Hong Kong Limited.

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.

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, 2021,

94,908,743

ordinary shares of the registrant, par value $0.00006 per share, were outstanding, of which

65,326,281

ordinary shares were held in the form of American Depositary Shares.

Table of Contents

Zai Lab Limited

Quarterly Report on Form

10-Q


		Page
PART I.	FINANCIAL INFORMATION		3
Item 1.	Financial Statements (Unaudited)		3
	Condensed Consolidated Balance Sheets as of March 31, 2021 and December 31, 2020		3
	Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2021 and 2020		4
	Condensed Consolidated Statements of Comprehensive Loss for the Three Months Ended March 31, 2021 and 2020		5
	Condensed Consolidated Statements of Stockholders’ (Deficit) Equity for the Three Months Ended March 31, 2021 and 2020		6
	Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2021 and 2020		7
	Notes to Unaudited Condensed Consolidated Financial Statements		8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		21
Item 3.	Quantitative and Qualitative Disclosures About Market Risk		30
Item 4.	Controls and Procedures		31
PART II.	OTHER INFORMATION		32
Item 1.	Legal Proceedings		32
Item 1A.	Risk Factors		32
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		33
Item 3.	Defaults Upon Senior Securities		33
Item 4.	Mine Safety Disclosures		33
Item 5.	Other Information		33
Item 6.	Exhibits		34
Signatures			35

Table of Contents

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 Quarterly Report on Form

10-Q

and the audited consolidated financial information and the notes thereto included in our Annual Report on Form

10-K

for the year ended December 31, 2020, which was filed with the Securities and Exchange Commission, or SEC, on March 1, 2021.

This discussion contains certain forward-looking statements that involve risks and uncertainties. Forward-looking statements are identified by words such as “believe,” “will,” “may,” “estimate,” “continue,” “anticipate,” “intend,” “should,” “plan,” “expect,” “predict,” “could,” “potentially,” “contemplate,” “project,” “seek,” “target,” “would” or the negative of these terms or similar expressions. You should read these statements carefully because they discuss future expectations, contain projections of future results of operations or financial condition, or state other “forward-looking” information, including all matters that are not historical facts. These forward-looking statements relate to our future plans, objectives, expectations, intentions and financial performance and the assumptions that underlie these statements. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those anticipated in the forward-looking statements because they relate to events and depend on circumstances that may or may not occur in the future. Factors that might cause such a difference include, but are not limited to, those discussed in the “Risk Factors” section of our Annual Report on Form

10-K

and those “Risk Factors” discussed below in Part II, Item 1A. Forward-looking statements are based on our management’s beliefs and assumptions and on information currently available to our management. These statements, like all statements in this Quarterly Report on Form

10-Q,

speak only as of their date, and except as required by law, we undertake no obligation to update or revise these statements in light of future developments. We caution investors that our business and financial performance are subject to substantial risks and uncertainties.

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)


			As of
			March 31, 2021			December 31, 2020
	Notes		$			$
Assets
Current assets:
Cash and cash equivalents		3		1,013,420			442,116
Short-term investments		5		—			744,676
Accounts receivable (net of allowance of $2 and $1 as of March 31, 2021 and 2020, respectively)				8,815			5,165
Inventories		6		12,629			13,144
Prepayments and other current assets				14,321			10,935

Total current assets				1,049,185			1,216,036
Restricted cash, non-current		4		743			743
Investments in equity investees		7		1,473			1,279
Prepayments for equipment				244			274
Property and equipment, net		8		29,016			29,162
Operating lease right-of-use assets				16,652			17,701
Land use rights, net				7,784			7,908
Intangible assets, net				1,585			1,532
Long term deposits				910			862
Value added tax recoverable				23,698			22,141

Total assets				1,131,290			1,297,638

Liabilities and shareholders’ equity
Current liabilities:
Accounts payable				41,415			62,641
Current operating lease liabilities				5,602			5,206
Other current liabilities		11		45,639			30,196

Total current liabilities				92,656			98,043
Deferred income				16,657			16,858
Non-current operating lease liabilities				12,307			13,392

Total liabilities				121,620			128,293

Commitments and contingencies (Note 18)
Shareholders’ equity
Ordinary shares (par value of $0.00006 per share; 500,000,000 shares authorized, 88,519,172 and 74,666,725 shares issued and outstanding as of March 31, 2021 and 2020, respectively)				5			5
Additional paid-in capital				1,967,802			1,897,467
Accumulated deficit				(946,513	)		(713,603	)
Accumulated other comprehensive loss		15		(11,624	)		(14,524	)

Total shareholders’ equity				1,009,670			1,169,345

Total liabilities and shareholders’ equity				1,131,290			1,297,638

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

Table of Contents

Zai Lab Limited

Unaudited condensed consolidated statements of operations

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


		Three Months Ended March 31,
		2021			2020
	Notes	$			$
Revenue	9		20,103			8,218
Expenses:
Cost of sales			(7,505	)		(2,084	)
Research and development			(203,852	)		(33,742	)
Selling, general and administrative			(35,838	)		(18,714	)

Loss from operations			(227,092	)		(46,322	)
Interest income			214			1,655
Interest expenses			—			(59	)
Other expense , net			(6,227	)		(3,125	)

Loss before income tax and share of gain (loss) from equity method investment			(233,105	)		(47,851	)
Income tax expense	10		—			—
Share of gain (loss) from equity method investment			195			(137	)

Net loss			(232,910	)		(47,988	)

Net loss attributable to ordinary shareholders			(232,910	)		(47,988	)

Loss per share - basic and diluted	12		(2.64	)		(0.66	)
Weighted-average shares used in calculating net loss per ordinary share - basic and diluted			88,374,928			72,956,538

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

Table of Contents

Zai Lab Limited

Unaudited condensed consolidated statements of comprehensive loss

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


	Three Months Ended March 31,
	2021			2020
	$			$
Net loss		(232,910	)		(47,988	)
Other comprehensive income, net of tax of nil:
Foreign currency translation adjustments		2,900			3,539

Comprehensive loss		(230,010	)		(44,449	)

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

Table of Contents

Zai Lab Limited

Unaudited condensed consolidated statements of shareholders’ (deficit) equity

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


	Ordinary shares				Additional					Accumulated other
	Number of Shares		Amount		paid in capital		Accumulated deficit			comprehensive (loss) income			Total
			$		$		$			$			$
Balance at December 31, 2020		87,811,026		5		1,897,467		(713,603	)		(14,524	)		1,169,345
Issuance of ordinary shares upon vesting of restricted shares		81,600		0		0		—			—			—
Exercise of shares option		58,364		0		702		—			—			702
Issuance of ordinary shares in connection with collaboration and license arrangement (Note 16)		568,182		0		62,250		—			—			62,250
Issuance cost adjustment for secondary listing		—		—		65		—			—			65
Share-based compensation		—		—		7,318		—			—			7,318
Net loss		—		—		—		(232,910	)		—			(232,910	)
Foreign currency translation		—		—		—		—			2,900			2,900

Balance at March 31, 2021		88,519,172		5		1,967,802		(946,513	)		(11,624	)		1,009,670

Balance at December 31, 2019		68,237,247		4		734,734		(444,698	)		4,620			294,660
Issuance of ordinary shares upon vesting of restricted shares		80,200		0		0		—			—			—
Exercise of shares option		49,278		0		346		—			—			346
Issuance of ordinary shares upon follow-on public offering, net of issuance cost of $740		6,300,000		0		280,568		—			—			280,568
Share-based compensation		—		—		6,463		—			—			6,463
Net loss		—		—		—		(47,988	)		—			(47,988	)
Foreign currency translation		—		—		—		—			3,539			3,539

Balance at March 31, 2020		74,666,725		4		1,022,111		(492,686	)		8,159			537,588

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

“0” in above table means less than 1,000 dollars.

Table of Contents

Zai Lab Limited

Unaudited condensed consolidated statements of cash flows

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


	Three Months Ended March 31,
	2021			2020
	$			$
Operating activities
Net loss		(232,910	)		(47,988	)
Adjustments to reconcile net loss to net cash used in operating activities:
Allowance for doubtful accounts		1			1
Inventory write-down		14			—
Depreciation and amortization expenses		1,448			1,070
Amortization of deferred income		(78	)		(78	)
Share-based compensation		7,318			6,463
Noncash research and development expenses (Note 16)		62,250			—
Share of (gain) loss from equity method investment		(195	)		137
Loss on disposal of property and equipment		4			—
Noncash lease expenses		1,322			1,062
Changes in operating assets and liabilities:
Accounts receivable		(3,651	)		(296	)
Inventories		502			(45	)
Prepayments and other current assets		(3,386	)		(1,375	)
Long term deposits		(47	)		(349	)
Value added tax recoverable		(1,558	)		(1,156	)
Accounts payable		(21,226	)		4,495
Other current liabilities		21,707			(1,408	)
Operating lease liabilities		(893	)		(663	)
Deferred income		(122	)		289

Net cash used in operating activities		(169,500	)		(39,841	)

Cash flows from investing activities:
Proceeds from maturity of short-term investments		743,902			50,000
Purchase of property and equipment		(1,683	)		(1,043	)
Purchase of intangible assets		(214	)		(5	)

Net cash used in investing activities		742,005			48,952

Cash flows from financing activities:
Repayment of short-term borrowings		—			(1,430	)
Proceeds from exercises of stock options		702			346
Proceeds from issuance of ordinary shares upon public offerings		—			281,295
Payment of public offering costs		(973	)		(727	)

Net cash (used in) provided by financing activities		(271	)		279,484

Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash		(930	)		(947	)

Net increase in cash, cash equivalents and restricted cash		571,304			287,648
Cash, cash equivalents and restricted cash - beginning of period		442,859			76,442

Cash, cash equivalents and restricted cash - end of period		1,014,163			364,090

Supplemental disclosure on non-cash investing and financing activities:
Payables for purchase of property and equipment		439			280
Payables for intangible assets		26			11
Payables for public offering costs		26			—
Supplemental disclosure of cash flow information:
Cash and cash equivalents		1,013,420			363,580
Restricted cash, non-current		743			510

Total cash and cash equivalents and restricted cash		1,014,163			364,090

Interest paid		—			67

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

Table of Contents

Zai Lab Limited

Notes to the unaudited condensed consolidated financial statements

(In thousands of U.S. dollars (“$”) and Renminbi (“RMB”) except for number of shares and per share data)

1. Organization and principal activities

Zai Lab Limited (the “Company”) was incorporated on March 28, 2013 in the Cayman Islands as an exempted company with limited liability under the Companies Law of the Cayman Islands. The Company and its subsidiaries (collectively referred to as the “Group”) are focused on developing and commercializing therapies that address medical conditions with unmet medical needs including, in particular, oncology, autoimmune disorders and infectious diseases.

The Group’s principal operations and geographic markets are in mainland China (hereinafter referred to as “China”), Hong Kong, Macau and Taiwan (hereinafter collectively referred to as “Greater China”). The Group 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 unaudited condensed consolidated financial statements of the Company have been prepared in accordance with the instructions to Form

10-Q

and Article 10 of Regulation

S-X.

Accordingly, they do not include all information and disclosures necessary for a presentation of the Company’s financial position, results of operations, and cash flows in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”). In the opinion of management, these financial statements reflect all normal recurring adjustments and accruals necessary for a fair statement of the Company’s unaudited condensed consolidated financial statements for such periods. The results of operations for any interim period are not necessarily indicative of the results for the full year. The December 31, 2020 condensed consolidated balance sheets data were derived from audited financial statements, but do not include all disclosures required by U.S. GAAP. These financial statements should be read in conjunction with the financial statements and notes thereto contained in the Company’s Annual Report on Form

10-K

for the year ended December 31, 2020.

(b) Principles of consolidation

The unaudited condensed consolidated financial statements include the financial statements of the Company and its subsidiaries. All intercompany transactions and balances among the Group and its subsidiaries are eliminated upon consolidation.

The preparation of the unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates 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 expenses during the period. Areas where management uses subjective judgment include, but are not limited to, estimating the useful lives of long-lived assets, estimating the current expected credit losses for financial assets, assessing the impairment of long-lived assets, discount rate of operating lease liabilities, revenue recognition, allocation of the research and development service expenses to the appropriate financial reporting period based on the progress of the research and development projects, share-based compensation expenses, recoverability of deferred tax assets and a lack of marketability discount of the ordinary shares issued in connection with collaboration and license arrangement

(Note 16). Management bases the estimates on historical experience and various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results could differ from these estimates.

(d) Fair value measurements

The Group applies ASC topic 820 (“ASC 820”),

Fair Value Measurements and Disclosures

, in measuring fair value. ASC 820 defines fair value, establishes a framework for measuring fair value and requires disclosures to be provided on fair value measurement.

ASC 820 establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:

Level 1 - Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.

Level 2 - Include other inputs that are directly or indirectly observable in the marketplace.

Level 3 - Unobservable inputs which are supported by little or no market activity.

Table of Contents

Zai Lab Limited

Notes to the unaudited condensed consolidated financial statements

(In thousands of U.S. dollars (“$”) and Renminbi (“RMB”) except for number of shares and per share data)

ASC 820 describes three main approaches to measuring the fair value of assets and liabilities: (1) market approach; (2) income approach and (3) cost approach. The market approach uses prices and other relevant information generated from market transactions involving identical or comparable assets or liabilities. The income approach uses valuation techniques to convert future amounts to a single present value amount. The measurement is based on the value indicated by current market expectations about those future amounts. The cost approach is based on the amount that would currently be required to replace an asset.

Financial instruments of the Group primarily include cash, cash equivalents and restricted cash, short-term investments, accounts receivable, prepayments and other current assets, accounts payable and other payables. As of March 31, 2021 and December 31, 2020, the carrying values of cash and cash equivalents, short-term investments, accounts receivable, prepayments and other current assets, accounts payable and other payable approximated their fair values due to the short-term maturity of these instruments, and the carrying value of restricted cash approximates its fair value based on the nature of the assessment of the ability to recover these amounts.

(e) Recent accounting pronouncements

Adopted Accounting Standards

In December 2019, the FASB issued ASU

2019-12,

Income Taxes (Topic 740):

Simplifying the Accounting for Income Taxes

. This update simplifies the accounting for income taxes as part of the FASB’s overall initiative to reduce complexity in accounting standards. The amendments include removal of certain exceptions to the general principles of ASC 740,

Income taxes

, and simplification in several other areas such as accounting for a franchise tax (or similar tax) that is partially based on income. The update is effective in fiscal years beginning after December 15, 2020, and interim periods therein, and early adoption is permitted. Certain amendments in this update should be applied retrospectively or modified retrospectively, all other amendments should be applied prospectively. The Group adopted this standard on January 1, 2021. There was no material impact to the Group’s financial position or results of operations upon adoption.

(f) Significant accounting policies

For a more complete discussion of the Company’s significant accounting policies and other information, the unaudited condensed consolidated financial statements and notes thereto should be read in conjunction with the consolidated financial statements included in the Company’s Annual Report on Form

10-K

for the year ended December 31, 2020.

3. Cash and cash equivalents


	As of
	March 31, 2021		December 31, 2020
	$		$
Cash at bank and in hand		1,012,587		441,283
Cash equivalents		833		833

		1,013,420		442,116

Denominated in:
US$		186,078		297,813
RMB (note (i))		37,732		23,898
Hong Kong dollar (“HK$”)		789,029		119,695
Australian dollar (“A$”)		581		710

		1,013,420		442,116

Note:

(i)	Certain cash and bank balances denominated in RMB were deposited with banks in China. The conversion of these RMB denominated balances into foreign currencies is subject to the rules and regulations of foreign exchange control promulgated by the government of the People’s Republic of China (“PRC”).

Table of Contents

Zai Lab Limited

Notes to the unaudited condensed consolidated financial statements

(In thousands of U.S. dollars (“$”) and Renminbi (“RMB”) except for number of shares and per share data)

4. Restricted cash,

non-current

The Group’s restricted cash balance of $743 and $743

as of March 31, 2021 and December 31, 2020, respectively, was long-term bank deposits held as collateral for issuance of letters of credit. These deposits will be released when the related letters of credit are settled by the Group.

5. Short-term investments

Short-term investments are primarily comprised of time deposits with original maturities between

three months and

one year.

As of March 31, 2021, the Group held no short-term investment. As of December 31, 2020, the Group’s short-term investments consisted entirely of short-term held to maturity debt instruments with high credit ratings, which were determined to have no risk of expected credit loss. Accordingly

, no

allowance for credit loss was recorded as of December 31, 2020.

6. Inventories

The Group’s inventory balance of $12,629 and $13,144

as of March 31, 2021 and December 31, 2020, respectively, mainly consisted of finished goods purchased from Tesaro Inc., now

GlaxoSmithKline

(GSK), and NovoCure Limited (“NovoCure”) for distribution in Hong Kong, as well as finished goods, work in process and certain raw materials for ZEJULA commercialization in China.


	As of
	March 31, 2021		December 31, 2020
	$		$
Finished goods		2,703		3,041
Raw materials		9,588		10,103
Work in process		338		—

Inventories		12,629		13,144

The Group write-down inventory for any excess or obsolete inventories or when the Group believe that the net realizable value of inventories is less than the carrying value. During the three months ended March 31, 2021 and 2020, the Group recorded write-downs of $43 and $nil, respectively, in cost of revenues.

7. Investments in equity investees

In June 2017, the Group entered into an agreement with three third-parties to launch JING Medicine Technology (Shanghai) Ltd. (“JING”), an entity which provides services for product discovery and development, consultation and transfer of pharmaceutical technology. The capital contribution by the Group was RMB26,250 in cash, which was paid by the Group in 2017 and 2018, representing 20% and 18% of the equity interest of JING as of December 31, 2020 and March 31, 2021 respectively. The Group accounts for this investment using the equity method of accounting due to the fact that the Group can exercise significant influence on the investee.

The Group recorded its gain on deemed disposal in this investee of

$463 and share of loss of $268 for the three months ended March 31, 2021, and recorded share of loss in this investee of $137 for the three months ended March 31, 2020.

Table of Contents

Zai Lab Limited

Notes to the unaudited condensed consolidated financial statements

(In thousands of U.S. dollars (“$”) and Renminbi (“RMB”) except for number of shares and per share data)

8. Property and equipment, net

Property and equipment consist of the following:


	As of
	March 31, 2021			December 31, 2020
	$			$
Office equipment		428			430
Electronic equipment		2,876			2,646
Vehicle		194			143
Laboratory equipment		12,357			11,933
Manufacturing equipment		12,116			12,198
Leasehold improvements		9,642			9,641
Construction in progress		2,915			2,423

		40,528			39,414
Less: accumulated depreciation		(11,512	)		(10,252	)

Property and equipment, net		29,016			29,162

Depreciation expenses for the three months ended March 31, 2021 and 2020 were $1,340 and $1,006, respectively.

9. Revenue

The Group’s revenue is primarily derived from the sale of ZEJULA and Optune in China and Hong Kong. The table below presents the Group’s net product sales for the three months ended March 31, 2021 and 2020.


	Three Months Ended March 31,
	2021			2020
	$			$
Product revenue - gross		46,555			8,937
Less: Rebate		(26,452	)		(719	)

Product revenue - net		20,103			8,218

Sales rebates are offered to distributors in 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 disaggregates net revenue by product for the three months ended March 31, 2021 and 2020:


	Three Months Ended March 31,
	2021		2020
	$		$
ZEJULA		12,606		6,345
Optune		7,130		1,873
Others		367		—

Total product revenue - net		20,103		8,218

10. 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 all 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, 2021 and December 31, 2020. No unrecognized tax benefits and related interest and penalties were recorded in any of the periods presented.

Table of Contents

Zai Lab Limited

Notes to the unaudited condensed consolidated financial statements

(In thousands of U.S. dollars (“$”) and Renminbi (“RMB”) except for number of shares and per share data)

11. Other current liabilities

Other current liabilities consist of the following:


	As of
	March 31, 2021		December 31, 2020
	$		$
Payroll		7,694		13,694
Professional service fee		3,274		3,128
Payables for purchase of property and equipment		439		788
Advance from customers		3,280		—
Accrued rebate to distributors		23,166		7,067
Others (note (i))		7,786		5,519

Total		45,639		30,196

Note:

(i)	Others are mainly payables to employees for exercising the share-based compensations, tax payables, payables for purchase of intangible assets, and payables related to travel and business entertainment expenses and conference fee .

12. Loss per share

Basic and diluted net loss per share for each of the period presented are calculated as follows:


	Three Months Ended March 31,
	2021			2020
Numerator:
Net loss attributable to ordinary shareholders		(232,910	)		(47,988	)
Denominator:
Weighted average number of ordinary shares- basic and diluted		88,374,928			72,956,538

Net loss per share-basic and diluted		(2.64	)		(0.66	)

As a result of the Group’s net loss for the three months ended March 31, 2021 and 2020, 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.


		As of
		March 31, 2021				March 31, 2020

SEC Form 10-Q filed by Zai Lab Limited