On November 8, 2022 Zymeworks Inc. (NYSE: ZYME), a clinical-stage biopharmaceutical company developing multifunctional biotherapeutics, reported financial results for the third quarter ended September 30, 2022 (Press release, Zymeworks, NOV 8, 2022, View Source [SID1234623447]).
Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:
Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing
Schedule Your 30 min Free Demo!
"Treatment of HER2-positive (HER2+) hormone-receptor positive (HR+) metastatic breast cancer (mBC) with the novel combination of zanidatamab, palbociclib, and fulvestrant."
Tweet this
"We have had a transformative quarter beginning with the presentation of results from our Phase 1 trial of zanidatamab zovodotin, the presentation of our early R&D day and culminating in our announcement of the zanidatamab licensing agreement with Jazz," said Kenneth Galbraith, Chair & CEO of Zymeworks. "All of these events are important steps in our path forward over the coming years. With a zanidatamab partnership executed, our cash runway expected to be extended, and a growing portfolio of exciting preclinical product candidates, we are well situated to continue advancing the development of novel biotherapeutics and further progress towards our goal of addressing difficult to treat cancers with traditionally poor patient prognoses."
Third Quarter 2022 Business Highlights and Recent Developments
Announced Exclusive Licensing Agreement for Zanidatamab with Jazz Pharmaceuticals
The exclusive licensing agreement to develop and commercialize zanidatamab globally, excluding existing Asia-Pacific territories already licensed to BeiGene Ltd., represents an exciting step in delivering this important therapy to patients globally. Under the terms of the agreement, Jazz will receive an exclusive license to develop and commercialize zanidatamab in the United States, Europe, Japan and all other territories except for those Asia/Pacific territories that Zymeworks previously licensed to BeiGene. Zymeworks is eligible to receive a $50 million upfront payment, following receipt of the clearance relating to the United States Hart-Scott Rodino Antitrust Improvements Act of 1976, and should Jazz decide to continue the collaboration following readout of the top-line clinical data from HERIZON-BTC-01, a second, one-time payment of $325 million. Zymeworks is also eligible to receive up to $525 million upon the achievement of certain regulatory milestones and up to $862.5 million in potential commercial milestone payments, for total potential payments of up to $1.76 billion. Pending approval, Zymeworks is eligible to receive tiered royalties between 10% and 20% on Jazz’s net sales. The transaction is expected to close before the end of 2022.
Zanidatamab Zovodotin (ZW49) Results from Preliminary Phase 1 Trial Presented in Oral Presentation at the ESMO (Free ESMO Whitepaper) Congress
Zymeworks presented encouraging preliminary results in this first-in-human trial evaluating zanidatamab zovodotin in HER2-expressing cancers as a monotherapy. Zanidatamab zovodotin exhibited a confirmed objective response rate of 31% at the 2.5 mg/kg Q3W dose (dose escalation plus expansion) across multiple tumor types in a heavily pretreated patient population and also displayed a differentiated tolerability profile with the majority of adverse events being grade 1 or 2 with no signals of interstitial lung disease, no significant neuropathy, and no significant neutropenia. The Company continues to consider multiple potential paths of development in indications such as non-small cell lung cancer, metastatic breast cancer, and other HER2-expressing pan-tumor indications as a monotherapy or in combination with standards of care, including PD-1 inhibitors. Enrollment in our weekly dosing cohort is complete, and we expect to determine a recommended Phase 2 dose over the next few months.
Completed Plan to Become a Delaware Domiciled Corporation
The corporate redomicile was an important step in helping facilitate our key strategic priorities, as laid out in January, and continues the consistent efforts towards increasing long-term stockholder value. The redomicile was overwhelmingly approved by Zymeworks securityholders at a Special Meeting held on October 7, 2022, and the Delaware Common Stock began trading on the New York Stock Exchange under the symbol "ZYME" on October 13, 2022.
Continued Progress in Zanidatamab Clinical Studies
Zanidatamab continued to advance in clinical studies across multiple HER2-expressing cancers with an acceptance for publication this year of a manuscript detailing results from our Phase 1 dose-escalation and expansion study of zanidatamab as monotherapy in patients with locally advanced and/or metastatic HER2-expressing or amplified cancers. Further, Zymeworks will present results in a spotlight poster discussion at the San Antonio Breast Cancer Symposium on Friday, December 9 at 7:00 am Central Time (CT) in a poster titled, "Treatment of HER2-positive (HER2+) hormone-receptor positive (HR+) metastatic breast cancer (mBC) with the novel combination of zanidatamab, palbociclib, and fulvestrant."
Early Research & Development Program Update
Zymeworks presented an update on its preclinical programs at an Early R&D day in New York City on October 20, 2022. At this event, we highlighted the progress in development of our novel pipeline assets and next-generation technology platforms and outlined the programs supporting our goal of filing five new investigational new drug (IND) applications in the next 5 years.
"It is an exciting time to be a part of a team at the forefront of antibody engineering and design," said Paul Moore, Ph.D., Chief Scientific Officer at Zymeworks. "With the presentation of our new pipeline assets, as well as the vision behind where we see our future growth in multispecific antibody therapeutics and antibody-drug conjugate development, we have an exciting future ahead. We look forward to reporting further progress as we develop and expand our product pipeline in the years ahead to pursue our goal of filing 5 new IND applications in the next 5 years."
Updates on the Company’s antibody drug conjugate programs, included:
Topoisomerase 1 inhibitor (TOPO1i) payload technology development
ZW191: a Folate Receptor-alpha targeted topoisomerase-1 ADC with IND expected in 2024
ZW251: a Glypican-3 targeted topoisomerase-1 ADC
ZW220: a NaPi2b targeted topoisomerase-1 ADC
Review of progress in multispecific antibody therapeutics development, including:
ZW171: a Mesothelin x CD3 targeted 2+1 format bispecific t cell engaging antibody with IND expected in 2024
Tri-specific T-cell Engagers incorporating co-stimulation (TriTCE-costim)
Tri-specific T-cell Engagers incorporating checkpoint inhibition (TriTCE-CPI)
Financial Results for the Quarter Ended September 30, 2022
Zymeworks’ revenue relates primarily to non-recurring upfront fees, expansion payments or milestone payments from collaboration and license agreements, which can vary in timing and amount from period to period, as well as payments for research and development support. Revenue for the three months ended September 30, 2022 was $2.6 million compared to $4.4 million for the same period of 2021. Revenue for 2022 included $2.6 million for research support and other payments from our partners. Revenue for the same period in 2021 included milestone revenue of $4.0 million from Janssen and $0.4 million in research support and other payments from our partners.
Research and development expense decreased by $12.8 million in the three months ended September 30, 2022 compared to the same period in 2021. Research and development expense in 2022 included non-cash stock-based compensation expense of $2.2 million, comprised of a $2.2 million expense from equity classified awards and a nominal amount of expense related to the non-cash, mark-to-market revaluation of certain historical liability classified awards. Excluding stock-based compensation expense and restructuring recovery of $0.1 million, research and development expense decreased on a Non-GAAP basis by $10.3 million in 2022 compared to 2021. The decrease related primarily to lower employee compensation expense as a result of a decrease in headcount due to the Company’s restructuring program, a decrease in manufacturing and clinical expenses for zanidatamab, as well as a decrease in licensing expenses related to preclinical activities.
"With the anticipated proceeds from our exclusive licensing agreement with Jazz, our significantly improved financial position allows Zymeworks to properly fund and advance exciting opportunities in our product pipeline," said Chris Astle, Ph.D., SVP and Chief Financial Officer. "With our cash runway potentially extended through at least 2026, and potentially beyond, we can focus on strategically advancing our preclinical and early clinical pipeline assets, and will look to maintain our strong balance sheet through proper expense management and continued pursuit of additional partnership and collaboration opportunities and asset monetizations."
We expect research and development expenditures to fluctuate over time in line with the advancement, expansion and completion of the clinical development of our product candidates, as well as our ongoing preclinical research activities.
Excluding the impact of stock-based compensation and restructuring recovery of $0.8 million, general and administrative expense decreased on a Non-GAAP basis by $0.1 million during three months ended September 30, 2022 compared to same period in 2021. This decrease was primarily due to a decrease in salaries and benefits expense as a result of decrease in headcount due to the Company’s restructuring program, partially offset by an increase in professional fees, depreciation and other expenses in 2022.
Net loss for the three months ended September 30, 2022 was $47.8 million compared to $60.6 million for the same period of 2021, representing a 21% decrease.
As of September 30, 2022, Zymeworks had $166.2 million in cash resources consisting of cash, cash equivalents and short-term investments. We continue to pursue additional partnerships and collaborations across our product portfolio in order to advance and broaden our early clinical and preclinical candidate pipeline.