On March 2, 2026 Zymeworks Inc. (Nasdaq: ZYME), a biotechnology company managing a portfolio of licensed healthcare assets, while developing a diverse pipeline of novel, multifunctional biotherapeutics, reported financial results for the fourth quarter and year ended December 31, 2025 and provided a summary of recent business highlights.
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"Over the past year, we have redefined our approach to what success can look like at Zymeworks. We have put in place a focused strategy, a refreshed leadership team, and a Board of Directors aligned around thoughtful capital allocation and long-term value creation for shareholders," said Kenneth Galbraith, Chair, Chief Executive Officer and interim Chief Financial Officer of Zymeworks. "Our objective is to combine a portfolio of predictable, recurring revenues driven by growing royalties with disciplined deployment of capital to deliver sustainable total shareholder returns over time. The additional capital from our recently announced non-recourse royalty-backed note provides non-dilutive capital to support the continued execution of our stock repurchase program and any potential strategic acquisitions aligned with our new business approach."
Galbraith continued, "We believe that our growing royalty portfolio positions us to generate durable and growing cash flows, while our R&D capabilities allow us to identify and advance internal or externally generated assets in ways that create incremental value. In 2026, we remain focused on timely execution of each element of our novel strategy. This means delivering clinical progress on our R&D portfolio, continued progress on development and commercialization of Ziihera and pasritamig by our partners, expanding partnerships and collaborations, and demonstrating tangible outcomes from our corporate strategy. The unique structured financing with Royalty Pharma illustrates our desire and capabilities to utilize creative financings and partnerships to drive long-term value for our shareholders."
Recent Developments
In March 2026, we entered into a $250.0 million royalty-backed note financing arrangement with Royalty Pharma. The structure of the loan facility was tailored to reflect the long-term potential of the underlying royalty of zanidatamab. This customized approach provides for only 30% of royalty interests related to Ziihera to be pledged as collateral and creates a longer-term duration than a traditional royalty loan, with any duration risk shared by us and Royalty Pharma. Compared to a traditional royalty-backed loan, we believe this structure enables us to preserve greater near-term royalty cash flows, which can be strategically deployed toward share repurchases or value-accretive acquisitions on an accelerated timeframe. In addition, we believe the transaction enhances strategic flexibility, with 70% of the Ziihera royalty remaining unencumbered through the duration of the loan, with full royalty rights reverting to us once the loan has been repaid in full. Importantly, the financing achieves these financial and strategic benefits with limited impact to our long-term economic participation in the Ziihera royalty stream compared to a traditional royalty-backed loan.
Wholly-Owned Programs
In January 2026, we announced our R&D priorities for 2026 and beyond, including our intention to continue conducting Phase 1 clinical studies for ZW191 and ZW251 in 2026. In addition, we announced that beyond 2026, we expect to focus our ADVANCE research efforts on multispecific antibody and engineered-cytokine platforms, funded partially with early-stage partnerships and collaborations. Investigational New Drug applications (IND) for multispecific programs, ZW209 and ZW1528, remain on track for submission in 2026. We anticipate that development of wholly-owned preclinical candidates from our multispecific antibody portfolio should provide for one planned IND filing per annum commencing in 2028. We intend to continue actively sharing peer-reviewed publications and data across preclinical and clinical programs, while we continue evaluating partnership opportunities.
"Results from the HERIZON-GEA-01 study point to the potential of this practice-changing, HER2-targeted therapy for patients with gastroesophageal cancer, a population with significant unmet need, and, if confirmed over time, across other HER2-expressing tumors," stated Paul Moore, Ph.D., Chief Scientific Officer at Zymeworks. "Designed and developed in-house, zanidatamab reflects the strength of our proprietary Azymetric platform, with our teams now applying our capabilities to advance our next-generation assets with increasing innovation and biological insight. We look forward to presenting continued progress in our R&D portfolio during 2026, including at the AACR (Free AACR Whitepaper) Annual Meeting in April in San Diego, CA."
Partnered Programs
Zanidatamab Demonstrated its Potential as HER2-Targeted Agent-of-Choice
In November 2025, together with our partners Jazz and BeOne, we announced positive topline results from the Phase 3 HERIZON-GEA-01 trial supporting Ziihera as the potential HER2-targeted agent-of-choice and new standard of care in first-line HER2+ locally advanced or metastatic GEA regardless of PD-L1 status. Based on these data, our partner Jazz expects to complete the supplemental Biologics License Application submission for zanidatamab in the first quarter of 2026 for the treatment of first-line HER2+ locally advanced or metastatic GEA under the real-time oncology review program in the U.S., where zanidatamab has been granted Breakthrough Therapy Designation. Jazz has also submitted these data for inclusion in the National Comprehensive Cancer Network Guidelines (NCCN Guidelines). Upon regulatory review, Jazz expects a potential commercial launch for zanidatamab in first-line HER2+ locally advanced or metastatic GEA to take place in the second half of 2026.
In January 2026, Jazz updated enrollment guidance for EmpowHER-303 in which they expect to complete enrollment in the first half of 2027, with a top-line data readout later in 2027 or in early 2028. The EmpowHER-BC-303 study is a randomized clinical trial comparing zanidatamab plus physician’s choice of chemotherapy against trastuzumab plus physician’s choice of chemotherapy for the treatment of patients with metastatic HER2+ breast cancer. Jazz is also pursuing collaborations with partners to combine zanidatamab with novel therapies. For example, the Phase 1 Beamion-BCGC1 trial (NCT06324357) in combination with Boehringer Ingelheim’s zongertinib was recently initiated to explore the combination in metastatic HER2+ breast cancer, along with other potential tumor types.
In January 2026, the New Drug Submission for Ziihera was approved by Health Canada for the treatment of adults with previously treated, unresectable locally advanced or metastatic HER2+ (IHC 3+) biliary tract cancer, as monotherapy. Ziihera’s market authorization has been issued with conditions, pending the results of trials to verify its clinical benefit. Subsequently, in February 2026 Ziihera was approved by the UK’s Medicines and Healthcare products Regulatory Agency (MHRA) for the treatment of biliary tract cancer.
In addition to the $53.0 million in milestone payments already received for Ziihera in biliary tract cancer, Zymeworks is entitled to receive up to $440.0 million in milestone payments from Jazz and BeOne related to approvals of Ziihera in GEA in the U.S., Europe, Japan, and China. Zymeworks also has the potential to receive milestone payments related to future regulatory approvals in further indications, beyond biliary tract cancer and GEA, totaling $89.0 million, collectively, from Jazz and BeOne. For Jazz this includes a $50.0 million milestone payment upon regulatory approval of zanidatamab from the U.S. Food and Drug Administration in a third indication and a $25.0 million milestone payment upon regulatory approval of zanidatamab from the European Commission in a third indication. For BeOne this includes a $4.0 million payment upon first patient dosed with zanidatamab in a third registrational study in the territory and a $10.0 million payment upon approval of zanidatamab by a regulatory authority for the third indication in the territory.
Under the collaboration agreement with Jazz, Zymeworks is eligible to receive tiered royalties of 10% to high teens on global annual sales of Ziihera up to $2.0 billion and 20% on annual net sales above $2.0 billion. Jazz holds global marketing rights to Ziihera, excluding Asia, and holds marketing rights in Japan.
Under the collaboration agreement with BeOne, Zymeworks is eligible to receive tiered royalties of mid-single to mid-double digits on global annual net sales of Ziihera up to $1.0 billion and 19.5% on annual net sales above $1.0 billion. BeOne holds marketing rights to Ziihera in Asia (excluding Japan).
Zymeworks expects that royalty revenue from Ziihera sales will increase as potential regulatory approvals are obtained in global markets for GEA. In addition, Zymeworks could be eligible to receive future commercial milestones totaling $977.5 million and increased royalties as additional indications of Ziihera are developed, approved and commercialized by Jazz and BeOne.
Pasritamig
In 2025, J&J initiated two Phase 3 trials studying pasritamig as monotherapy in late-line metastatic castration-resistant prostate cancer (mCRPC) and pasritamig in combination with docetaxel in participants with metastatic castration-resistant prostate cancer (KLK2-PASenger).
In February 2026, J&J presented new clinical data on pasritamig at the 2026 American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) Genitourinary (ASCO-GU) annual meeting as follows:
Poster – 171: Safety and efficacy of pasritamig + docetaxel in participants with metastatic castration-resistant prostate cancer: Initial results of a phase 1b study.
Poster – 172: Phase 1 safety, efficacy, pharmacokinetics and pharmacodynamics of pasritamig in Asian population with mCRPC.
We remain eligible to receive up to $18.0 million in development milestone payments and up to $186.5 million in commercial milestone payments relating to pasritamig, as well as royalties on product sales.
Share Repurchase Program Update
In November 2025, the Board of Directors authorized a new share repurchase program providing the ability to repurchase up to $125.0 million in common stock. This followed the completion of a $60.0 million share repurchase program originally announced in August 2024. The share repurchase program underscores our confidence in Zymeworks’ long-term growth prospects and helps enhance shareholder value by reducing share count, while maintaining cash resources for operations and growth investments and preserving financial flexibility for strategic opportunities.
As of March 2, 2026, the Company has utilized approximately $62.5 million of this approved repurchase program to acquire 2,580,415 shares at an average price of $24.22 per share (exclusive of commission expense and estimated excise tax). As of March 2, 2026, the Company had approximately 73,749,607 million common shares outstanding (unaudited).
Financial Outlook
Operating Expense Discipline: In January 2026, the Company provided guidance on adjusted gross operating expense (non-GAAP), which combines adjusted research and development (R&D) expense (non-GAAP) and adjusted general and administrative (G&A) expense (non-GAAP) (excluding stock compensation expense), outlining a disciplined framework of approximately $300.0 million in aggregate adjusted gross operating expenditures (non-GAAP) over a three-year period ending December 31, 2028. The Company also announced that it expects a greater proportion of adjusted gross operating expense (non-GAAP) to be incurred in 2026 and decline in 2027 and 2028, reflecting a deliberate and measured investment across R&D and G&A aligned with clearly defined strategic priorities. This outlook reflects current expectations, underscores the Company’s continued focus on cost discipline and capital allocation rigor, and does not include any potential acquisition-related expenses or new partnerships and collaborations. The Company’s GAAP gross operating expenses in 2025 were $198.5 million and the Company currently expects adjusted gross operating expenses (non-GAAP) in 2026 to be approximately 20% lower than adjusted gross operating expenses (non-GAAP) in 2025 of $170.5 million, excluding the impact of any acquisition-related expenses or new partnerships and collaborations.
Financial Results for the Quarter and Year Ended December 31, 2025
The key financial highlights for our 2025 results are as follows:
Revenue – Total revenue was $2.5 million in 4Q-2025, and $106.0 million for 2025, compared to $31.0 million and $76.3 million for the same periods in 2024, respectively. The increase for the year was driven mainly by achievement of significant clinical and regulatory milestones and exercise of an option under our collaborations with J&J, BeOne, GSK, Daiichi Sankyo, and BMS, which collectively contributed to the majority of the year‑over‑year growth. This growth was partially offset by a decline in development‑support and drug‑supply revenue from Jazz, reflecting the transition of responsibility for certain zanidatamab clinical activities to Jazz under our amended agreements. As Jazz continues to assume these activities, we expect development‑support revenue from Jazz to continue decreasing, while royalty revenue from Jazz is expected to grow over time as commercial sales of Ziihera increase.
Research and Development (R&D) Expenses – R&D expenses were $31.2 million in 4Q-2025, and $137.0 million for 2025, compared to $37.1 million and $134.6 million for the same periods in 2024, respectively. The increase for the year was primarily due to an increase in preclinical and research expenses for ZW209 and ZW1528 and higher costs from the progression of clinical studies for ZW251, ZW191 and ZW171 until ZW171 was discontinued. The increase was also driven by non-cash stock-based compensation expense and an increase in consulting and rent expense. These impacts were partially offset by reduced spending on ZW220 (paused), zanidatamab (transitioned to Jazz), and zanidatamab zovodotin (discontinued in 2023).
General and Administrative (G&A) Expenses – G&A expenses were $15.4 million in 4Q-2025, and $61.5 million for 2025, compared to $16.2 million and $61.5 million for the same periods in 2024, respectively. Year-over-year changes were driven by an increase in non-cash stock-based compensation, offset by a decrease in salaries and benefits due to reduced headcount, consulting, rent, and information technology expenses.
Other Income, net – Other income was $2.7 million in 4Q-2025, and $12.8 million for 2025, compared to $4.4 million and $20.5 million for the same periods in 2024, respectively. The change for the year was driven primarily by lower interest income due to a reduction in cash, cash equivalents and marketable securities as well as by a net foreign exchange loss.
Net Loss – Net loss was $41.2 million in 4Q-2025, and $81.1 million for 2025, compared to a net loss of $23.5 million and $122.7 million for the same periods in 2024, respectively. The change for the year was primarily due to an increase in revenue and decreases in total operating expenses and in income tax expense, partially offset by a decrease in interest income.
Liquidity – As of December 31, 2025, we had $270.6 million of cash resources consisting of cash, cash equivalents and marketable securities, comprised of $41.2 million in cash and cash equivalents and $229.4 million in marketable securities. Based on current operating plans, and assuming full execution of the $125.0 million share repurchase plan, we expect our existing cash resources as of December 31, 2025, when combined with anticipated regulatory milestone payments of $440.0 million related to the potential approvals of Ziihera in GEA in the U.S., Europe, Japan, and China, as well as the net proceeds from our royalty-backed note financing with Royalty Pharma, to fund our planned operations beyond 2028. This anticipated cash runway does not take into account any contribution from additional future milestone payments or royalties related to Ziihera, other current licensed product candidates or contributions from future partnerships and collaborations.
(Press release, Zymeworks, MAR 2, 2026, View Source [SID1234663201])