On May 15, 2017 Zymeworks Inc. ("Zymeworks") (NYSE: ZYME; TSX: ZYME) a clinical-stage biopharmaceutical company dedicated to the discovery, development and commercialization of next-generation multifunctional biotherapeutics, initially focused on the treatment of cancer, reported financial results for the first quarter ended March 31, 2017 (Press release, Zymeworks, MAY 15, 2017, View Source [SID1234519134]). Schedule your 30 min Free 1stOncology Demo! "During the first quarter, among other highlights, we received top-line data from the dose escalation stage of our on-going Phase 1 clinical trial of our lead product candidate, ZW25," said Ali Tehrani, Ph.D., Zymeworks’ President & CEO. "ZW25 has demonstrated preliminary anti-tumor activity across multiple cancer types in HER2 expressing patients who have progressed after several lines of treatment with HER2-targeted therapies."
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First Quarter Highlights:
Preliminary data for ZW25 phase 1 clinical trial received
Orphan drug designation for ZW25 in gastric cancer received
Second research milestone with collaborator Eli Lilly announced
Two industry veterans added to Board of Directors
State-of-the-art lab facility opened
On May 3, 2017, subsequent to the first quarter, Zymeworks completed its initial public offering and sold 4,500,000 common shares at a price of $13.00 per share. In addition, Zymeworks has granted the underwriters an option, exercisable within 30 days of the date of its final prospectus relating to the IPO, to purchase up to an additional 675,000 common shares.
First Quarter Ended March 31, 2017 Financial Results
All amounts are in U.S. dollars. Zymeworks’ unaudited condensed consolidated financial statements are prepared in accordance with accounting principals generally accepted in the United States ("U.S. GAAP").
Revenues for the first quarter ended March 31, 2017 were $0.2 million compared to $0.3 million for the same period of 2016. The decrease in collaboration revenue of $0.1 million is due to a $0.3 million decrease in research support payments from Merck, which was partially offset by the increase in research support payments of $0.2 million from Daiichi.
Research and development expenditures for the first quarter ended March 31, 2017 were $9.1 million, compared to $7.9 million for the same period in 2016. The increase of $1.2 million, was primarily due to increased activities associated with our therapeutic platforms and early-stage research and discovery programs, recorded in other research activities.
General and administrative expenses in the first quarter ended March 31, 2017 were $6.3 million compared to $2.1 million for the same period in 2016. General and administrative expenses increased by $4.2 million, compared to the same period in 2016, primarily due to an increase in professional fees and compensation costs. The compensation cost increase was the result of higher share-based compensation expenses due to reclassification under U.S. GAAP of certain awards from equity to liability for accounting purposes as well as certain new hires. The increase in professional fees over the same period in 2016 was associated with consulting services as well as legal, intellectual property, assurance and taxation services.
Net loss for the three months ended March 31, 2017 was $15.9 million. Zymeworks expects that over the next several years, research and development expenditures will increase in connection with the ongoing development of product candidates and other clinical, preclinical and regulatory activities.
As of March 31, 2017, Zymeworks had $26.8 million in cash and cash equivalents and short-term investments, as well as $1.9 million in SR&ED and IRAP receivables. On May 3, 2017, subsequent to the first quarter, Zymeworks completed its initial public offering for a total of $58.5 million in aggregate gross proceeds.