What Management Said
Read the full Q1 2026 transcript ↗You should refer to the company's first quarter 2026 earnings release for information and reconciliation of historical non-GAAP measures to the comparable GAAP financial measures. The increase was driven primarily by normal quarter-to-quarter variability in customer ordering with underlying demand broadly stable. Taken together with the upcoming data expected from LOTIS-7 and the indolent lymphoma studies, we expect to accelerate our revenue growth trajectory starting in 2027. This increase reflects a shift in the allocation of certain personnel costs due to a change in focus from research and development activities to commercial manufacturing activities.
As Ameet noted, we're managing our costs carefully, and we remain disciplined in our capital allocation towards potential value creation while driving efficiencies. We have achieved solid commercial performance while maintaining our strict capital discipline as we look forward to multiple anticipated value-creating catalysts, beginning with the expected LOTIS-5 readout. We are excited about delivering on our strategy and confident we can drive significant potential long-term growth starting in 2027. Maybe first, commercially, the $20 million in 1Q, it's about 15% growth annually.
I know you mentioned ordering pattern, but it just seems a more growth than we've seen in recent quarters. We have to do earnings, of course, but we haven't been engaging with analysts or investors since April 1. It's a reallocation of those expenses into cost of goods and we capitalize one time inventory, but the cost of goods are gonna increase because of this fixed cost and now it's getting allocated. We expect this year to be largely in line with what the previous years are and only see a revenue trajectory increase next year.
- First-quarter net product revenue rose to $20.0 million from $17.4 million a year earlier (about 15% product growth), the second consecutive quarter above $20 million, with underlying demand described as broadly stable.
- Cost discipline continued: non-GAAP total operating expenses fell 13% year over year to $42.9 million, GAAP net loss narrowed to $33 million ($0.21 per share) from $38.6 million ($0.36), and non-GAAP adjusted net loss improved to $19.7 million from $24 million.
- The company ended the quarter with $231 million of cash, maintaining an expected runway at least into 2028.
- The pivotal LOTIS-5 top-line readout was confirmed on track for before the end of June 2026, the nearest major catalyst, and LOTIS-7 enrollment of roughly 100 patients was on track to complete in Q2 with full data by year-end.
- The last independent data monitoring committee (IDMC) safety review, in the prior fall, recommended proceeding with LOTIS-5 as designed.
- Total revenue declined year over year because licensing and royalty revenue was lower -- the prior-year period included a $5 million partner milestone -- which masked the underlying product growth.
- Cost of product sales rose $1.6 million to $3.6 million on a reallocation of certain personnel from R&D to commercial manufacturing, a structural increase that will persist in future quarters.
- The company entered a prolonged quiet/blackout period from April 1 until the LOTIS-5 disclosure, halting investor and analyst engagement and potentially forcing it to cancel conference participation.
- Management cautioned it was 'too soon to call a trend' on the two strong revenue quarters, keeping full-year expectations broadly in line with prior years.
Guidance Changes
| Metric | Period | Current guidance |
|---|---|---|
| LOTIS-5 top-line | Before end of June 2026 | On track; will disclose primary PFS (median PFS, hazard ratio), mature secondary endpoints, an overall-survival read (mature or trend) and top-line safety; publication by year-end 2026 |
| LOTIS-5 regulatory | H1 2027 / mid-2027 | sBLA submission by year-end 2026 (assuming positive data); compendia inclusion H1 2027; confirmatory approval to follow (~mid-2027) |
| LOTIS-7 | End of 2026 | Enrollment to complete in Q2 2026; full data at a medical meeting by end of 2026; then pursue compendia and assess regulatory strategy |
| Indolent lymphoma data | End 2026 - mid 2027 | Lead-investigator conference data; regulatory/compendia strategies to be assessed |
| 2026 revenue | FY2026 | Expected broadly in line with prior years; revenue trajectory increase expected in 2027 |
| Cost of product sales | Forward | Structurally higher going forward due to the R&D-to-manufacturing personnel reallocation; R&D expected to keep declining |
Performance Breakdown
| Metric | YoY | Note |
|---|---|---|
| Net product revenue | +15% (to $20.0M from $17.4M) | Normal quarter-to-quarter ordering variability with broadly stable underlying demand; second straight quarter above $20M. |
| Total revenue | Down year over year | Lower licensing and royalty revenue -- the prior-year quarter included a $5 million partner milestone -- offsetting product growth. |
| GAAP net loss | Narrowed to $33M / $0.21 (from $38.6M / $0.36) | Reduced R&D expense, plus more weighted-average shares outstanding lowering the per-share loss. |
| Non-GAAP adjusted net loss | Improved to $19.7M (from $24M) | Lower R&D expense and continued cost discipline. |
| Non-GAAP operating expenses | -13% (to $42.9M) | Primarily lower R&D expense. |
| Cost of product sales | +$1.6M (to $3.6M) | Reallocation of personnel from R&D to commercial manufacturing; an ongoing structural increase. |
| Cash and equivalents | $231M (from $261.3M at Dec 31, 2025) | Operating cash use during the quarter; runway maintained at least into 2028. |
Earnings Call Themes & Trends
| Topic | Previous mention | Current period | Trend |
|---|---|---|---|
| LOTIS-5 readout imminent | Q2 2026 catalyst | Confirmed for before end of June; the readout, if positive, is the key event unlocking ZYNLONTA's lifecycle-management value. | — |
| Quiet period / blindness | Approaching readout | Company blinded to data and in a blackout period since April 1, limiting investor engagement and potentially conference participation until disclosure. | — |
| Commercial momentum vs. trend | Two strong quarters | Second consecutive quarter above $20M encouraging, but management calls it too soon to raise the range given historical quarterly variability. | — |
| Margin/cost mix shift | Cost reallocation | R&D expense keeps declining while cost of product sales steps up structurally as personnel shift to commercial manufacturing. | — |
| Growth deferred to 2027 | Inflection timing | No revenue impact expected in 2026; the trajectory increase is expected from 2027 with LOTIS-5 approval and compendia inclusion. | — |
Q&A Summary
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