On March 2, 2026 Royalty Pharma plc (Nasdaq: RPRX) and Zymeworks Inc. (Nasdaq: ZYME) reported an agreement for $250 million in funding from Royalty Pharma in the form of a non-recourse royalty-backed note with repayments due from 30% of worldwide tiered royalties on Ziihera (zanidatamab-hrii) owed to Zymeworks from Jazz Pharmaceuticals (Jazz) and BeOne Medicines (BeOne).
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"We are delighted to enter into this royalty funding agreement with Zymeworks on royalties from Ziihera, a therapy with the potential to meaningfully change the treatment landscape for patients with HER2‑positive gastric and biliary tract cancers," said Pablo Legorreta, Chief Executive Officer and Chairman of the Board of Royalty Pharma. "The recent clinical results from HERIZON-GEA-01 for Ziihera in first-line metastatic gastroesophageal adenocarcinoma (mGEA) underscore its potential to prolong survival in a disease with poor prognosis and urgent need of new treatment options. This transaction enables us to participate in the long-term value of this important therapy while providing Zymeworks capital to achieve their strategic and financial goals."
"This strategic funding provides non-dilutive capital that enhances our flexibility to continue repurchasing shares at current prices, which we believe represents a compelling discount to our estimate of intrinsic value," said Kenneth Galbraith, Chair, Chief Executive Officer and Acting Chief Financial Officer. "It also gives us additional capacity to pursue strategic acquisitions that meet our rigorous risk-adjusted return criteria and fund our cash runway beyond 2028. We believe this disciplined capital allocation strategy will increase the underlying value of the business, while thoughtfully reducing our share count over time, setting us up for higher long-term shareholder value."
Transaction Terms
Under the terms of the agreement, Zymeworks will receive $250 million from Royalty Pharma through the issuance of a non-recourse royalty-backed note. Repayment of the note will be secured by 30% of future royalties from the global sales of Ziihera, generated under collaboration agreements with partners Jazz and BeOne, equating to an approximately low to mid-single digit upward tiering royalty up to a pre-specified repayment limit. Royalty Pharma will cease receiving any such royalties when it receives cumulative payments of either 1.65x the note amount by December 31, 2033, or 1.925x the note amount at any time thereafter, at which time no further repayments will be owed with respect to the note.
Under the collaboration agreement with Jazz, Zymeworks is eligible to receive tiered royalties of 10% to high teens on global (outside of Asia (other than Japan), Australia and New Zealand) annual sales of Ziihera up to $2.0 billion and 20% on annual net sales above $2.0 billion.
Under the collaboration agreement with BeOne, Zymeworks is eligible to receive tiered royalties of mid-single to mid-double digits on 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), Australia and New Zealand.
Zymeworks will retain 70% of royalties on Ziihera sales during the note repayment period, with full royalty rights reverting to Zymeworks once the royalty payments to Royalty Pharma have ceased. All earned regulatory and commercial milestone payments under its agreements with Jazz and BeOne will be retained by Zymeworks, including up to $440.0 million in near-term milestone payments tied to future regulatory approvals of Ziihera in mGEA, $89.0 million regulatory milestones for third indications, beyond biliary tract cancer and mGEA, and up to $977.5 million in potential commercial milestone payments, for total potential remaining payments of up to $1.5 billion.
Advisors
TD Cowen served as the financial advisor to Zymeworks on the transaction and Gibson Dunn served as its legal advisor. Covington & Burling, Choate and Maiwald acted as legal advisors to Royalty Pharma.
About Ziihera (zanidatamab-hrii)
Ziihera (zanidatamab-hrii) is a bispecific HER2-directed antibody that binds to two extracellular sites on HER2. Binding of zanidatamab with HER2 results in internalization leading to a reduction in HER2 expression of the receptor on the tumor cell surface. Zanidatamab induces complement-dependent cytotoxicity (CDC), antibody-dependent cellular cytotoxicity (ADCC), and antibody-dependent cellular phagocytosis (ADCP). These mechanisms result in tumor growth inhibition and cell death in vitro and in vivo.1 In the United States, Ziihera is indicated for the treatment of adults with previously treated, unresectable or metastatic HER2-positive (IHC 3+) biliary tract cancer (BTC), as detected by an FDA-approved test. The U.S. FDA granted accelerated approval for this indication based on overall response rate and duration of response. Continued approval for this indication may be contingent upon verification and description of clinical benefit in a confirmatory trial(s).
Zanidatamab is being developed in multiple clinical trials as a targeted treatment option for patients with solid tumors that express HER2. Zanidatamab is being developed by Jazz and BeOne under license agreements from Zymeworks, which first developed the molecule.
The FDA granted two Breakthrough Therapy designations for zanidatamab’s development: one for patients with previously treated HER2 gene-amplified BTC, and one for patients with locally advanced or metastatic gastroesophageal adenocarcinoma (GEA), and two Fast Track designations for zanidatamab: one as a single agent for refractory BTC and one in combination with standard-of-care chemotherapy for first-line GEA. Additionally, zanidatamab has received Orphan Drug designations from the FDA for the treatment of BTC and GEA, as well as Orphan Drug designation from the European Medicines Agency for the treatment of BTC and gastric cancer.
The full U.S. Prescribing Information for Ziihera, including BOXED Warning, is available at: View Source
(Press release, Zymeworks, MAR 2, 2026, View Source [SID1234663204])