What is Zai Lab Probability of Financial Distress (%)?
Probability of Financial Distress (%) measures the probability that a company will go bankrupt in the upcoming year given its current financial position. A higher ratio indicates a larger probability of bankruptcy for the company, while a lower ratio indicates a healthier fundamental. As of today, Zai Lab's Probability of Financial Distress (%) is 0.06%.
Like the Altman Z-Score, the PFD measures a company's bankruptcy risk. However, the main drawback of the Z-score is it does not apply to banks and insurance companies. According to Investopedia, the concept of "working capital" does not apply to banks and insurance companies, as financial institutions do not have typical current assets or current liabilities like inventories or accounts payable.
Competitive Comparison of Zai Lab's Probability of Financial Distress (%)
For the Biotechnology subindustry, Zai Lab's Probability of Financial Distress (%), along with its competitors' market caps and Probability of Financial Distress (%) data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Zai Lab's Probability of Financial Distress (%) Distribution in the Biotechnology Industry
For the Biotechnology industry and Healthcare sector, Zai Lab's Probability of Financial Distress (%) distribution charts can be found below:
* The bar in red indicates where Zai Lab's Probability of Financial Distress (%) falls into.
Zai Lab Probability of Financial Distress (%) Calculation
Probability of Financial Distress (%) (PFD) was developed by John Campbell, Jens Hilscher and Jan Szilagyi in their Search of Distress Risk. It measures the probability that a company will go bankrupt within the next 12 months given its current financial position.
The Probability of Financial Distress (%) was obtained by a logit probability model based on eight explanatory variables. The logit formula to compute the probability of financial distress (LPFD) is given below:
| LPFD | = | -20.12 * NIMTAAVG | + | 1.60 * TLMTA | - | 7.88 * EXRETAVG | + | 1.55 * SIGMA | - | 0.005 * RSIZE | - | 2.27 * CASHMTA | + | 0.070 * MB | - | 0.09 * PRICE | - | 8.87 |
| = | -7.39 |
The Probability of Financial Distress (%) (PFD) was then obtianed by:
| PFD | = | 1 | / | (1 + e^(-LPFD)) | * | 100% |
| = | 0.06% |
The eight explanatory variables are:
1. NIMTAAVG = Net Income to Market Total Assets
*Note that for companies reported quarterly, geometrically declining weighted quarterly Net Income data in latest four quarters are used.
2. TLMTA = Total liabilities to Market Total Assets
3. CASHMTA = Cash to Market Total Assets
For non-financial companies, CASHMTA is measured as:
4. EXRETAVG = Excess Return compared to the S&P 500
EXRETAVG is the weighted excess return compared to the S&P 500 in past 12 month. Geometrically declining weights are imposed on the monthly excess return to reflect lagged information. The weight is halved each quarter.
5. SIGMA = Standard Deviation of Daily Returns
For sigma, we use the annualized standard deviation of a company's returns over the past 92 days (or 63 trading days).
6. RSIZE = Relative Size
| RSIZE | = | log (Market Cap | / | Total Market Cap of S&P 500 companies) |
7. MB = Market to Adjusted Book Equity Ratio
8. PRICE
PRICE is measured as the log of the stock price, capped at log(15).
Zai Lab (Zai Lab) Business Description
Traded in Other Exchanges
Address
4560 Jinke Road, Jinchuang Plaza, Building 1, 4th Floor, Pudong, Shanghai, CHN, 201210
Zai Lab Ltd is a biopharmaceutical company focusing on discovering or licensing, developing, and commercializing proprietary therapeutics that address areas of unmet medical need including in the fields of oncology, autoimmune and infectious diseases. The pipeline of proprietary drug candidates of the company includes ZL-2306 for treatment across multiple solid tumor types including ovarian and certain types of breast and lung cancers; ZL-2401 which is an antibiotic in a new class of tetracycline derivatives; and ZL-2301 is an oral, small molecule which targets HCC.
Executives
| Harald Reinhart |
officer: Chief Medical Officer |
4560 JINKE ROAD, BLDG. 1, FOURTH FLOOR, PUDONG, SHANGHAI F4 201210 |
| Edmondson Frazor Titus Iii |
officer: Chief Legal Officer |
4560 JINKE ROAD, BLDG. 1, FOURTH FLOOR, PUDONG, SHANGHAI F4 201210 |
| Ying Du |
director, officer: Chairwoman & CEO |
C/O ZAID LAB LIMITED, 4560 JINKE ROAD, BLDG. 1, 4F, PUDONG, SHANGHAI F4 201210 |
| Rafael Amado |
officer: See Remarks |
210 EAST GRAND AVE, SOUTH SAN FRANCISCO CA 94080 |
| Joshua L Smiley |
officer: Chief Operating Officer |
LILLY CORPORATE CENTER, INDIANAPOLIS IN 46285 |
| Yajing Chen |
officer: Chief Financial Officer |
314 MAIN STREET, 4TH FLOOR, SUITE 100, CAMBRIDGE MA 02142 |
| Michel Vounatsos |
director |
BIOGEN INC., 225 BINNEY ST., CAMBRIDGE MA 02142 |
| Peter Wirth |
director |
37 HANCOCK STREET, BOSTON MA 02114 |
| John D Diekman |
director |
C/O 5 AM VENTURES, 501 2ND STREET, SUITE 350, SAN FRANCISCO CA 94107 |
| William Lis |
director |
PORTOLA PHARMACEUTICALS, INC., 270 EAST GRAND AVENUE, SOUTH SAN FRANCISCO CA 94080 |
| Richard Gaynor |
director |
C/O NEON THERAPEUTICS, 40 ERIE STREET, SUITE 110, CAMBRIDGE MA 02139 |
| Tao Fu |
director, officer: President & COO |
3175 HANOVER STREET, PALO ALTO CA 94304 |
| Scott W Morrison |
director |
C/O GLOBAL BLOOD THERAPEUTICS, INC., 400 EAST JAMIE COURT SUITE 101, SOUTH SAN FRANCISCO CA 94080 |
| Cho William Ki Chul |
officer: Chief Financial Officer |
4560 JINKE ROAD, BLDG. 1, FOURTH FLOOR, PUDONG, SHANGHAI F4 201210 |
| Kai-xian Chen |
director |
4560 JINKE ROAD, BLDG. 1, FOURTH FLOOR, PUDONG, SHANGHAI F4 201210 |
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