<SEC-DOCUMENT>0001193125-21-324449.txt : 20220712
<SEC-HEADER>0001193125-21-324449.hdr.sgml : 20220712
<ACCEPTANCE-DATETIME>20211109160931
<PRIVATE-TO-PUBLIC>
ACCESSION NUMBER:		0001193125-21-324449
CONFORMED SUBMISSION TYPE:	CORRESP
PUBLIC DOCUMENT COUNT:		2
FILED AS OF DATE:		20211109

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			Zai Lab Ltd
		CENTRAL INDEX KEY:			0001704292
		STANDARD INDUSTRIAL CLASSIFICATION:	PHARMACEUTICAL PREPARATIONS [2834]
		IRS NUMBER:				000000000
		STATE OF INCORPORATION:			E9
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		CORRESP

	BUSINESS ADDRESS:	
		STREET 1:		4560 JINKE ROAD
		STREET 2:		BLDG. 1, 4F, PUDONG
		CITY:			SHANGHAI
		STATE:			F4
		ZIP:			201210
		BUSINESS PHONE:		862161632588

	MAIL ADDRESS:	
		STREET 1:		4560 JINKE ROAD
		STREET 2:		BLDG. 1, 4F, PUDONG
		CITY:			SHANGHAI
		STATE:			F4
		ZIP:			201210
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<TYPE>CORRESP
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<TD VALIGN="bottom">ROPES &amp; GRAY LLP</TD></TR>


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<TD VALIGN="top">PRUDENTIAL TOWER</TD></TR>
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<TD VALIGN="top">800 BOYLSTON STREET</TD></TR>
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<TD VALIGN="top">BOSTON, MA 02199-3600</TD></TR>
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<TD VALIGN="top">WWW.ROPESGRAY.COM</TD></TR>
</TABLE> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">November&nbsp;9, 2021 </P>
<P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B><U>VIA EDGAR </U></B></P> <P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">U.S. Securities and Exchange Commission
</P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Division of Corporation Finance </P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Office of Life Sciences
</P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">100 F Street, N.E. </P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Washington, D.C. 20549 </P>
<P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD WIDTH="7%" VALIGN="top" ALIGN="left">Attention:</TD>
<TD ALIGN="left" VALIGN="top"> <P STYLE=" margin-top:0pt ; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman; " ALIGN="left">Tracie Mariner </P></TD></TR></TABLE>
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<TD ALIGN="left" VALIGN="top"> <P STYLE=" margin-top:0pt ; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman; " ALIGN="left">Kevin Vaughn </P></TD></TR></TABLE> <P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD WIDTH="7%" VALIGN="top" ALIGN="left">Re:</TD>
<TD ALIGN="left" VALIGN="top"> <P STYLE=" margin-top:0pt ; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman; " ALIGN="left">Zai Lab, Ltd. </P></TD></TR></TABLE>
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<TD ALIGN="left" VALIGN="top"> <P STYLE=" margin-top:0pt ; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman; " ALIGN="left">Form <FONT STYLE="white-space:nowrap">10-K</FONT> for Fiscal Year Ended December&nbsp;31, 2020
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<TD ALIGN="left" VALIGN="top"> <P STYLE=" margin-top:0pt ; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman; " ALIGN="left">Filed March&nbsp;1, 2021 </P></TD></TR></TABLE>
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<TD ALIGN="left" VALIGN="top"> <P STYLE=" margin-top:0pt ; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman; " ALIGN="left">File <FONT STYLE="white-space:nowrap">No.&nbsp;001-38205</FONT> </P></TD></TR></TABLE>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Ladies and Gentlemen: </P> <P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">On half of Zai Lab, Ltd.
(the &#147;Company&#148;), we are hereby providing the following responses to the comment letter from the staff of the Division of Corporate Finance, Office of Life Science (the &#147;Staff&#148;) of the Securities and Exchange Commission (the
&#147;Commission&#148;) dated September&nbsp;29, 2021 related to the Company&#146;s Annual Report on Form <FONT STYLE="white-space:nowrap">10-K</FONT> for the year ended December&nbsp;31, 2020 (the &#147;Form
<FONT STYLE="white-space:nowrap">10-K&#148;).</FONT> To assist your review, we have presented the text of the Staff&#146;s comment in italics below. The responses and information described below are based upon information provided to us by the
Company. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><U>Form <FONT STYLE="white-space:nowrap">10-K</FONT> for Fiscal Year Ended December&nbsp;31, 2020 </U></P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><U>Part I </U></P> <P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><U>Item 1. Business, page 1 </U></P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">1. <I>At the onset of Part 1, provide prominent disclosure about the legal and operational risks associated with being based in or having the majority of the
company&#146;s operations in China. Your disclosure should make clear whether these risks could result in a material change in your operations and/or the value of your ADSs or could significantly limit or completely hinder your ability to offer or
continue to offer securities to investors and cause the value of such securities to significantly decline or be worthless. Your disclosure should address how recent statements and regulatory actions by China&#146;s government, such as those related
data security or anti-monopoly concerns, has or may impact the company&#146;s ability to conduct its business, accept foreign investments, or list on an U.S. or other foreign exchange. Your Business section should address, but not necessarily be
limited to, the risks highlighted in Part 1.</I> </P>
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<TD VALIGN="top" ALIGN="right">November 9, 2021</TD></TR></TABLE> <p STYLE="margin-top:0pt;margin-bottom:0pt ; font-size:8pt">&nbsp;</P>
 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B>Response to Comment 1: </B></P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">The Company acknowledges the Staff&#146;s comment and has supplemented its disclosure on pages <FONT STYLE="white-space:nowrap">1-2</FONT> of
the Company&#146;s Form <FONT STYLE="white-space:nowrap">10-Q</FONT> for the quarterly period ending September&nbsp;30, 2021 (the &#147;2021 Q3 Form <FONT STYLE="white-space:nowrap">10-Q&#148;)</FONT> to add a risk factor to disclose the legal and
operational risks associated with being based in or having the majority of the Company&#146;s operations in China. The Company will also provide prominent disclosure of such risks at the onset of Part 1 and the Business section of the Company&#146;s
Form <FONT STYLE="white-space:nowrap">10-K</FONT> for the year ending December&nbsp;31, 2021. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">2. <I>At the onset of Part 1, clearly disclose how you will
refer to the holding company and subsidiaries when providing the disclosure throughout the document so that it is clear to investors which entity the disclosure is referencing and which subsidiaries or entities are conducting the business
operations. Refrain from using terms such as &#147;we&#148; or &#147;our&#148; when describing activities or functions of a subsidiary with a different domicile than the holding company. Disclose clearly the entity (including the domicile) in which
investors are purchasing their interest. </I></P> <P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B>Response to Comment 2: </B></P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">The Company acknowledges the Staff&#146;s comment and advises the Staff that, in future filings, beginning with the Company&#146;s 2021 Q3 Form
<FONT STYLE="white-space:nowrap">10-Q,</FONT> the Company will refrain from using terms such as &#147;we&#148; or &#147;our&#148; when describing activities or functions of a subsidiary with a different domicile than the holding company. The Company
has also supplemented its disclosure on page 1 of the Company&#146;s 2021 Q3 Form <FONT STYLE="white-space:nowrap">10-Q</FONT> to disclose the Company&#146;s subsidiaries that are conducting the business operations. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">3. <I>On page 1 and as a separate risk factor under Item 1A, disclose each permission that you or your subsidiaries are required to obtain from Chinese
authorities to operate and issue these securities to foreign investors, including approvals needed to transfer scientific data as discussed on page 89. State whether you or your subsidiaries are covered by permissions requirements from the CSRC, CAC
or any other entity, and state affirmatively whether you have received all requisite permissions and whether any permissions have been denied, including those related to the transfer of scientific </I><I>data.</I> </P>
<P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B>Response to Comment 3: </B></P> <P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">The Company
acknowledges the Staff&#146;s comment and has supplemented its disclosure on pages 2, <FONT STYLE="white-space:nowrap">26-27,</FONT> 50 of the Company&#146;s 2021 Q3 Form <FONT STYLE="white-space:nowrap">10-Q</FONT> to disclose each permission that
the Company or the Company&#146;s subsidiaries are required to obtain from Chinese authorities to operate and issue securities to foreign investors. The Company will also include such risk factor on page 1 of the Company&#146;s Form <FONT
STYLE="white-space:nowrap">10-K</FONT> for the year ending December&nbsp;31, 2021. </P>
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<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
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 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">4. <I>In your Business section and as a separate risk factor, provide a clear description of how cash is
transferred through your organization. Disclose your intentions to distribute earnings or settle amounts owed. Quantify any cash flows and transfers of other assets by type that have occurred between the holding company and its subsidiaries and
direction of transfer. Quantify any dividends or distributions that a subsidiary has made to the holding company, which entity made such transfer, and their tax consequences. Similarly quantify dividends or distributions made to U.S. investors, the
source, and their tax consequences. Describe any restrictions on foreign exchange and your ability to transfer cash between entities, across borders, and to U.S. investors. Describe any restrictions and limitations on your ability to distribute
earnings from your businesses, including subsidiaries, to the parent company and U.S. investors.</I> </P> <P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B>Response to Comment 4: </B></P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The Company acknowledges the Staff&#146;s comment and has supplemented its disclosure on pages <FONT STYLE="white-space:nowrap">2-3</FONT> of the
Company&#146;s 2021 Q3 Form <FONT STYLE="white-space:nowrap">10-Q</FONT> to include a separate risk factor with a clear description of how cash is transferred through the Company&#146;s organization and the other additional information. The Company
will also provide such disclosures in the Business section of the Company&#146;s Form <FONT STYLE="white-space:nowrap">10-K</FONT> for the year ending December&nbsp;31, 2021. </P>
<P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><U>Summary of Significant Risk Factors, page iii </U></P> <P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">5. <I>In
your summary of risk factors, disclose the risks that your corporate structure and being based in or having the majority of the company&#146;s operations in China poses to investors. In particular, describe the significant regulatory, liquidity, and
enforcement risks with cross-references to the more detailed discussion of these risks in your risk factor disclosure. For example, specifically discuss risks arising from the legal system in China, including risks and uncertainties regarding the
enforcement of laws and that rules and regulations in China can change quickly with little advance notice; and the risk that the Chinese government may intervene or influence your operations at any time, or may exert more control over offerings
conducted overseas and/or foreign investment in China-based issuers, which could result in a material change in your operations and/or the value of your ADSs. Acknowledge any risks that any actions by the Chinese government to exert more oversight
and control over offerings that are conducted overseas and/or foreign investment in China-based issuers could significantly limit or completely hinder your ability to offer or continue to offer securities to investors and cause the value of such
securities to significantly decline or be worthless.</I> </P> <P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B>Response to Comment 5: </B></P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">The Company acknowledges the Staff&#146;s comment and has supplemented its disclosure on page 52 of the Company&#146;s 2021 Q3 Form <FONT
STYLE="white-space:nowrap">10-Q</FONT> to incorporate additional disclosure of the risks that the Company&#146;s corporate structure and being based in or having the majority of the Company&#146;s operations in China poses to investors. The Company
will also include such risk factor in the Company&#146;s Form 10-K for the year ending December 31, 2021. </P>
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<TD VALIGN="top" ALIGN="right">November 9, 2021</TD></TR></TABLE> <p STYLE="margin-top:0pt;margin-bottom:0pt ; font-size:8pt">&nbsp;</P>
 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><U>Item 1A. Risk Factors, page 61 </U></P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">6. <I>Revise your risk factors to acknowledge that if the PRC government determines that your offshore corporate structure does not comply with PRC
regulations, or if these regulations change or are interpreted differently in the future, your shares may decline in value or become worthless if you are unable to assert your contractual control rights over the assets of your PRC subsidiaries that
conduct all or substantially all of your operations.</I> </P> <P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B>Response to Comment 6: </B></P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">The Company acknowledges the Staff&#146;s comment and has supplemented its disclosure on page 50 of the Company&#146;s 2021 Q3 Form <FONT
STYLE="white-space:nowrap">10-Q</FONT> its risk factor disclosures to incorporate this additional information. The Company will also include such risk factor in the Company&#146;s Form 10-K for the year ending December 31, 2021. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">7. <I>Given the Chinese government&#146;s significant oversight and discretion over the conduct of your business, please revise to separately highlight the
risk that the Chinese government may intervene or influence your operations at any time, which could result in a material change in your operations and/or the value of your ADSs. Also, given recent statements by the Chinese government indicating an
intent to exert more oversight and control over offerings that are conducted overseas and/or foreign investment in China-based issuers, acknowledge the risk that any such action could significantly limit or completely hinder your ability to offer or
continue to offer securities to investors and cause the value of such securities to significantly decline or be worthless.</I> </P> <P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B>Response to Comment 7:
</B></P> <P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">The Company acknowledges the Staff&#146;s comment and advises the Staff that it has included such disclosure in Item 1A. Risk Factors
with the Company&#146;s Form <FONT STYLE="white-space:nowrap">10-Q</FONT> for the quarterly period ending June&nbsp;30, 2021. The Company also expanded its risk factor disclosures on pages 49 and 52 of the Company&#146;s 2021 Q3 Form <FONT
STYLE="white-space:nowrap">10-Q</FONT> to further highlight the risk that the Chinese government may intervene or influence the Company&#146;s operations at any time, which could result in a material change in the Company&#146;s operations and/or
the value of the Company&#146;s ADSs and acknowledge the risk that any such action could significantly limit or completely hinder the Company&#146;s ability to offer or continue to offer securities to investors and cause the value of such securities
to significantly decline or be worthless. The Company will also include such risk factor in the Company&#146;s Form 10-K for the year ending December 31, 2021. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">8. <I>In light of recent events indicating greater oversight by the Cyberspace Administration of China over data security, particularly for companies seeking
to list on a foreign exchange, please revise your disclosure to explain how this oversight impacts your business and your offering and to what extent you believe that you are compliant with the regulations or policies that have been issued by the
CAC to date.</I> </P>
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<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="top" ALIGN="right">November 9, 2021</TD></TR></TABLE> <p STYLE="margin-top:0pt;margin-bottom:0pt ; font-size:8pt">&nbsp;</P>
 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B>Response to Comment 8: </B></P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">The Company acknowledges the Staff&#146;s comment and advises the Staff that it has included such disclosure in Item 2. Management&#146;s
Discussion and Analysis of Financial Conditions and Results of Operations &#150; Recent Developments &#150; Recent Regulatory Developments and Item 1A. Risk Factors with the Company&#146;s Form <FONT STYLE="white-space:nowrap">10-Q</FONT> for the
quarterly period ending June&nbsp;30, 2021. The Company also expanded its existing disclosures on page 28 of the Company&#146;s 2021 Q3 Form <FONT STYLE="white-space:nowrap">10-Q</FONT> to further explain how Cyberspace Administration of
China&#146;s oversight impacts our business and our compliance with the regulations or policies that have been issued by the Cyberspace Administration of China to date. The Company will also include such risk factor in the Company&#146;s Form 10-K
for the year ending December 31, 2021. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center">*&nbsp;&nbsp;&nbsp;&nbsp;*&nbsp;&nbsp;&nbsp;&nbsp; * </P>
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<TD VALIGN="top">Securities and Exchange Commission</TD>
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<TD VALIGN="top" ALIGN="right">November 9, 2021</TD></TR></TABLE> <p STYLE="margin-top:0pt;margin-bottom:0pt ; font-size:8pt">&nbsp;</P>
 <P STYLE="margin-top:0pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">We hope that the foregoing has been responsive to the Staff&#146;s comments. If you have any
questions about this letter or require any further information, please call my office at (617) <FONT STYLE="white-space:nowrap">235-4961.</FONT> </P> <P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P><DIV ALIGN="right">
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<TD VALIGN="top"> <P STYLE=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman">Very truly yours,</P></TD></TR>
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<TD VALIGN="top"> <P STYLE=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman">/s/ Thomas J. Danielski</P></TD></TR>
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<TD VALIGN="top"> <P STYLE=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman">Thomas J. Danielski</P></TD></TR>
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<TD WIDTH="4%" VALIGN="top" ALIGN="left">cc:</TD>
<TD ALIGN="left" VALIGN="top"> <P STYLE=" margin-top:0pt ; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman; " ALIGN="left">F. Ty Edmondson </P></TD></TR></TABLE>
<P STYLE="margin-top:0pt; margin-bottom:0pt; margin-left:4%; font-size:10pt; font-family:Times New Roman">Billy Cho </P>
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