Shares in the Chinese biopharma firm have been pounded by disappointing trial results for a cancer drug and sluggish sales of its existing products
Key Takeaways:
- The survival benefits for a new gastric cancer drug, bemarituzumab, were weaker than expected in the final analysis of a Phase Three trial
- The news unsettled investors, coming after Zai Lab's latest quarterly earnings also missed the mark
The "Rule of 10" is a widely accepted yardstick within the biopharma industry for the chances of commercial success.
According to the adage, it takes around 10 years and $1 billion to develop a viable innovative drug, but only around 10% of prospective products make the grade, with the rest falling by the wayside.
Clinical disappointments may be a common risk factor in drug development, but they still have the power to rattle investors.
The trigger for the sell-off was an analysis that showed weaker than expected survival benefits for the gastric cancer drug bemarituzumab, when used in conjunction with chemotherapy. Zai Lab announced on Sept. 3 that its partner Amgen Inc. (AMGN.US), the study's sponsor, had found the scale of the benefit had "attenuated" compared with interim trial results.
As a result, Zai Lab said it intended to wait for data from another trial in which the product is combined with an immunotherapy drug, nivolumab, as well as chemotherapy, before making any regulatory filings. Those findings are not due until the end of the year or the first half of 2026, implying at least a six-month delay in filing for approval to market the drug.
The promising outcome from the initial trial had boosted market expectations for the drug, one of Zai Lab's most closely watched assets. On the day after Zai Lab delivered the trial update, its Hong Kong shares opened down nearly 7%, sank to a three-month low of HK$22.52 in intra-day trade and closed with a loss of 11.99%.
The pain was not confined to Zai Lab alone. The innovative drug sector had built up gains in a broad-based rally and many biotechs suffered corrections on the same day, with Hengrui Pharma (1276.HK; 600276.SH) and Ascletis Pharma (1672.HK) among the stocks that fell more than 5%.
Earnings miss the mark
Benzinga Disclaimer: This article is from an unpaid external contributor. It does not represent Benzinga’s reporting and has not been edited for content or accuracy.
© 2026 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
To add Benzinga News as your preferred source on Google, click here.
