Zymeworks Inc. (Nasdaq: ZYME), a clinical-stage biotechnology
company developing novel multifunctional biotherapeutics, today
reported financial results for the first quarter ended
March 31, 2023 and provided a summary of recent business
highlights.
“In the first quarter, we continued executing
against our corporate priorities throughout the company as outlined
early in 2023 as we strive to make a meaningful difference for
patients through innovation, while delivering impactful results for
our stockholders. Looking forward, we will continue to work on
development and commercialization of zanidatamab with our
collaborators, Jazz Pharmaceuticals and BeiGene, while progressing
and prioritizing the development of our early-stage pipeline of ADC
and MSAT product candidates under our '5 by 5' strategy, which
outlines our goal of having five novel therapeutics in the clinic
by 2027,” said Kenneth Galbraith, Chair and CEO of Zymeworks. "In
addition, in April we presented eleven abstracts at the AACR
meeting, including new preclinical data throughout our early-stage
pipeline. At ASCO in June, we look forward to multiple
presentations on zanidatamab, including an oral presentation of
pivotal data from our Phase 2b study of zanidatamab in previously
treated HER2-amplified BTC patients."
Recent Highlights and Current
Developments
- Eleven Abstracts Presented at AACR
Meeting in AprilDuring the quarter, we presented a substantial
number of preclinical and clinical abstracts at the 2023 AACR
annual meeting in April in Orlando, Florida. These posters
showcased the breadth and potential of our early-stage portfolio of
next-generation ADCs and MSATs, as well as providing strong support
for the capabilities and expertise of our scientific team and
technology platforms to produce differentiated new medicines that
can make a meaningful difference in the lives of patients with
difficult-to-treat cancers.
- Zanidatamab Clinical Studies to be
Presented at ASCOIn partnership with Jazz and BeiGene, multiple
abstracts for zanidatamab were accepted for presentation at the
ASCO Annual Meeting taking place June 2-6 in Chicago, Illinois.
Clinical data from the Phase 2b study of zanidatamab in previously
treated HER2-amplified BTC patients was selected by ASCO as an oral
presentation and will be the first presentation of the full pivotal
trial results. Additionally, we expect to present updated results
from a Phase 1b/2 study of zanidatamab in combination with
docetaxel as a first-line therapy for patients with advanced
HER2-positive breast cancer.
- Zanidatamab Zovodotin (zani zo)
Preclinical Data Presented at AACRIn concert with data presented on
our preclinical and clinical product candidates, we presented data
on our HER2-targeted ADC, zani zo, These data provided the
mechanistic rationale for zani zo to be combined with an anti-PD-1
therapy, showing that zani zo induces hallmarks of immunogenic cell
death, which when combined with an anti-PD-1 checkpoint inhibitor
may show a mechanistic advantage when used as a combination
therapy. These data underpin our strategy to target non-small cell
lung cancer through a dual blockade of HER2 and PD-1 in our planned
Phase 2 studies of zani zo anticipated to begin this year.
Significant and Purposeful Preclinical
Presence at AACR
"AACR was a great opportunity to showcase and
share recent progress we have made in the development of next
generation antibody-based cancer therapeutics with fellow
researchers, potential partners and the broader investment
community," stated Paul Moore, Ph.D., Chief Scientific Officer at
Zymeworks. "Not only did we highlight new data on our named
preclinical candidates ZW191, ZW171, ZW220, and ZW251, we were able
to present data and share the unique capabilities of our
proprietary engineering platforms and integrated trispecific
technologies. We aim to maintain this momentum as we focus on
bringing these novel medicines to the clinic starting with ZW191
and ZW171, both on track for regulatory filings to commence initial
clinical studies in 2024."
Preclinically, at the 2023 edition of the AACR
meeting in Orlando, we presented updates on our four named
programs, as well as a variety of our other early-stage discovery
programs and technology platforms. ZW191, our TOPO1 inhibitor ADC
candidate targeting folate receptor alpha (FRα), and ZW171, our 2+1
multispecific candidate targeting mesothelin (MSLN), continue to
progress as both programs remain on track for potential IND filings
in 2024. We also presented data supporting continued development of
our other TOPO1 inhibitor based ADCs, including ZW251, our TOPO1
inhibitor ADC candidate targeting Glypican-3 (GPC3), and ZW220, our
TOPO1 inhibitor ADC candidate targeting NaPi2b.
Along with our ADC candidates, we had multiple
posters showcasing our next-generation MSAT candidates and
technologies, including three separate trispecific T cell engager
technology platforms that incorporate either co-stimulation for
tumors with anergic and/or low T cell numbers, checkpoint
inhibition for tumors with immunosuppressive microenvironments, or
a conditional/cleavable mask for tumors targets with normal tissue
limitations. Further, we presented an update on our masked cytokine
program, leveraging our protein engineering expertise and
technologies to potentially enhance the therapeutic window.
Following on the strong showing at AACR, we look forward to
continued updates across our early-stage research and development
programs, which highlight our focused and continued advancement of
our pipeline as we continue to progress candidates in alignment
with our '5 by 5' strategy.
Financial Results for the Quarter Ended
March 31, 2023
Revenue for the three months ended
March 31, 2023 was $35.6 million compared to $1.9 million
for the same period of 2022. Revenue for 2023 included $34.4
million revenue for development support and drug supply payments
from Jazz and $1.2 million for research support and other payments
from our other partners. Revenue for the same period in 2022
included $1.9 million in research support and other payments from
our other partners.
Research and development expense decreased by
$16.6 million in the three months ended March 31, 2023
compared to the same period in 2022. For the three months ended
March 31, 2023, research and development expense included non-cash
stock-based compensation expense of $0.4 million, comprised of a
$0.4 million expense from equity classified awards and a nominal
expense related to the non-cash, mark-to-market revaluation of
certain historical liability classified awards. Excluding
stock-based compensation expense and 2022 restructuring expense,
research and development expense decreased on a Non-GAAP basis by
$14.7 million in the first quarter of 2023 compared to the same
period of 2022. The decrease was related primarily due to lower
manufacturing and clinical research organization (CRO) contract
expenses partially offset by an increase in clinical investigator
costs for zanidatamab and an increase in preclinical expenses
compared to the same period in 2022. In addition, salaries and
benefits expenses decreased compared to the same period in 2022,
due to lower headcount in 2023 and lower non-recurring severance
expenses.
General and administrative expense increased by
$4.8 million for the three months ended March 31, 2023
compared to the same period in 2022. General and administrative
expense in 2023 included a non-cash stock-based compensation
expense of $1.7 million comprised of a $2.4 million expense from
equity-classified equity awards and a $0.7 million recovery related
to the non-cash mark-to-market revaluation of certain historical
liability-classified equity awards. Excluding stock-based
compensation and 2022 restructuring expense, general and
administrative expense increased on a Non-GAAP basis by $2.0
million during three months ended March 31, 2023 compared to
same period in 2022. This increase was primarily due to increase in
professional fees and consulting expenses in 2023, which was offset
by lower salaries and benefits expenses due to lower headcount in
2023 and lower non-recurring severance expenses in 2023.
Net loss for the three months ended
March 31, 2023 was $24.4 million compared to $72.6 million for
the same period of 2022, representing a 66% decrease in net
quarterly loss. The decrease in net quarterly loss was primarily
due to revenue from our collaboration agreement with Jazz, and
increase in interest income as well as decrease in research and
development expense, which was partially offset by higher general
and administrative expense and an increase in income tax
expense.
"We remain on track to achieve our net operating
cash burn guidance for this year and have been mindful of
continuing our focused spend across our programs," said Chris
Astle, Ph.D., Senior Vice President and Chief Financial Officer of
Zymeworks. "Our current forecast of cash runway through at least
2026 continues to be a source of strength and provides the
potential to build a diverse and valuable clinical-stage product
pipeline with broad opportunities over the long-term."
As of March 31, 2023, Zymeworks had $412.4
million of cash, cash equivalents, and marketable securities,
comprised of $181.6 million in cash and cash equivalents and $230.8
million in marketable securities. Based on current operating plans,
we expect to have cash resources to fund planned operations through
at least the end of 2026, and potentially beyond. For the calendar
year 2023, we continue to expect a net operating cash burn of
between $90 million and $120 million, including planned capital
expenditures of approximately $15 million.
About Zymeworks Inc.
Zymeworks Inc. (Nasdaq: ZYME) is a global
biotechnology company committed to the discovery, development, and
commercialization of novel, multifunctional biotherapeutics.
Zymeworks' mission is to make a meaningful difference for people
impacted by difficult-to-treat cancers and other serious diseases.
Zymeworks' complementary therapeutic platforms and fully integrated
drug development engine provide the flexibility and compatibility
to precisely engineer and develop highly differentiated
antibody-based therapeutic candidates. Zymeworks engineered and
developed zanidatamab, a HER2-targeted bispecific antibody using
Zymeworks' proprietary Azymetric™ technology. Zymeworks has entered
into separate agreements with BeiGene, Ltd. (BeiGene) and Jazz
Pharmaceuticals Ireland Limited (Jazz), granting each of BeiGene
and Jazz with exclusive rights to develop and commercialize
zanidatamab in different territories. Zanidatamab is currently
being evaluated in global Phase 1, Phase 2, and Phase 3 clinical
trials, including certain ongoing pivotal clinical trials as a
treatment for patients with HER2-expressing cancers. Zymeworks'
next clinical candidate, zanidatamab zovodotin (ZW49), is a
HER2-targeted bispecific antibody-drug conjugate (ADC) developed
using Zymeworks' proprietary Azymetric™ and ZymeLink™ Auristatin
technologies. Zanidatamab zovodotin is currently being evaluated in
a Phase 1 clinical trial for patients with a variety of
HER2-expressing, HER2-amplified or HER2-mutant cancers. Zymeworks
is also advancing a deep pipeline of product candidates based on
its experience and capabilities in both ADC and multispecific
antibodies (MSAT). In addition to Zymeworks' wholly owned pipeline,
its therapeutic platforms have been further leveraged through
strategic partnerships with global biopharmaceutical companies. For
information about Zymeworks, visit www.zymeworks.com and follow
@ZymeworksInc on Twitter.
Cautionary Note Regarding Forward-Looking
Statements
This press release includes “forward-looking
statements” or information within the meaning of the applicable
securities legislation, including Section 27A of the Securities Act
of 1933, as amended, and Section 21E of the Securities Exchange Act
of 1934, as amended. Forward-looking statements in this press
release include, but are not limited to, statements that relate to
Zymeworks’ expectations regarding implementation of its strategic
priorities; the anticipated benefits of the license agreement with
Jazz, including Zymeworks’ ability to receive any future milestone
payments and royalties thereunder; the anticipated closing of the
transactions contemplated by the Transfer Agreement, including the
entry into the amended collaboration agreement with Jazz; the
potential addressable market of zanidatamab; the timing of and
results of interactions with regulators; Zymeworks’ clinical
development of its product candidates and enrollment in its
clinical trials; anticipated clinical data presentations;
expectations regarding future regulatory filings and approvals and
the timing thereof; potential therapeutic effects of zanidatamab
and Zymeworks’ other product candidates; expected financial
performance and future financial position; the commercial potential
of technology platforms and product candidates; anticipated
continued receipt of revenue from existing and future partners;
Zymeworks’ preclinical pipeline; anticipated sufficiency of cash
resources and other potential sources of cash to fund Zymeworks’
planned operations through at least 2026, and potentially beyond;
the anticipated amount of certain expenses that we will credit to
Jazz in connection with the transfer of contracts and
responsibilities to Jazz in connection with the Transfer Agreement
and amended collaboration agreement; Zymeworks’ anticipated net
operating cash burn and planned capital expenditures in 2023;
Zymeworks’ ability to execute new collaborations and partnerships
and other information that is not historical information. When used
herein, words such as “plan”, “believe”, “expect”, “may”,
“continue”, “anticipate”, “potential”, “will”, “progress”, and
similar expressions are intended to identify forward-looking
statements. In addition, any statements or information that refer
to expectations, beliefs, plans, projections, objectives,
performance or other characterizations of future events or
circumstances, including any underlying assumptions, are
forward-looking. All forward-looking statements are based upon
Zymeworks’ current expectations and various assumptions. Zymeworks
believes there is a reasonable basis for its expectations and
beliefs, but they are inherently uncertain. Zymeworks may not
realize its expectations, and its beliefs may not prove correct.
Actual results could differ materially from those described or
implied by such forward-looking statements as a result of various
factors, including, without limitation: any of Zymeworks’ or its
partners’ product candidates may fail in development, may not
receive required regulatory approvals, or may be delayed to a point
where they are not commercially viable; Zymeworks may not achieve
milestones or receive additional payments under its collaborations;
regulatory agencies may impose additional requirements or delay the
initiation of clinical trials; the impact of new or changing laws
and regulations; market conditions; the impact of the COVID-19
pandemic on Zymeworks’ business, research and clinical development
plans and timelines and results of operations, including impact on
its clinical trial sites, collaborators, and contractors who act
for or on Zymeworks’ behalf, may be more severe and more prolonged
than currently anticipated; clinical trials may not demonstrate
safety and efficacy of any of Zymeworks’ or its collaborators’
product candidates; Zymeworks’ assumptions and estimates regarding
its financial condition, future financial performance, estimated
cash runway and anticipated amounts of expenses to be credited to
Jazz may be incorrect; inability to maintain or enter into new
partnerships or strategic collaborations; and the factors described
under “Risk Factors” in Zymeworks’ quarterly and annual reports
filed with the Securities and Exchange Commission, including its
Quarterly Report on Form 10-Q for its quarter ended March 31,
2023 (a copy of which may be obtained at www.sec.gov and
www.sedar.com). Although Zymeworks believes that such
forward-looking statements are reasonable, there can be no
assurance they will prove to be correct. Investors should not place
undue reliance on forward-looking statements. The above
assumptions, risks and uncertainties are not exhaustive.
Forward-looking statements are made as of the date hereof and,
except as may be required by law, Zymeworks undertakes no
obligation to update, republish, or revise any forward-looking
statements to reflect new information, future events or
circumstances, or to reflect the occurrences of unanticipated
events.
ZYMEWORKS INC.
Condensed Interim Consolidated Statements of Loss and
Comprehensive Loss (Expressed in thousands of U.S.
dollars except share and per share data) (unaudited)
|
Three Months Ended March 31, |
|
2023 |
|
2022 |
Revenue |
|
|
|
Research and development collaborations |
$ |
35,578 |
|
|
$ |
1,916 |
|
Operating expenses: |
|
|
|
Research and development |
|
45,912 |
|
|
|
62,510 |
|
General and administrative |
|
16,947 |
|
|
|
12,092 |
|
Total operating expenses |
|
62,859 |
|
|
|
74,602 |
|
Loss from operations |
|
(27,281 |
) |
|
|
(72,686 |
) |
Other income (expense), net |
|
4,318 |
|
|
|
(13 |
) |
Loss before income taxes |
|
(22,963 |
) |
|
|
(72,699 |
) |
Income tax (expense) recovery |
|
(1,390 |
) |
|
|
74 |
|
Net loss |
$ |
(24,353 |
) |
|
$ |
(72,625 |
) |
Other comprehensive income: |
|
|
|
Unrealized gain on available for sale securities, net of tax of
$0 |
|
720 |
|
|
|
— |
|
Total other comprehensive income |
|
720 |
|
|
|
— |
|
Comprehensive loss |
$ |
(23,633 |
) |
|
$ |
(72,625 |
) |
|
|
|
|
Net loss per common share: |
|
|
|
Basic |
$ |
(0.36 |
) |
|
$ |
(1.18 |
) |
Diluted |
$ |
(0.37 |
) |
|
$ |
(1.19 |
) |
Weighted-average common stock outstanding: |
|
|
|
Basic |
|
66,739,308 |
|
|
|
61,367,368 |
|
Diluted |
|
66,742,080 |
|
|
|
61,378,170 |
|
|
|
|
|
|
|
|
|
ZYMEWORKS INC.Selected
Condensed Consolidated Balance Sheet
Data(Expressed in thousands of U.S.
dollars)
|
March 31,2023 |
|
December 31,2022 |
|
(unaudited) |
|
|
Cash, cash equivalents and marketable securities |
$ |
412,379 |
|
|
$ |
492,232 |
|
Working capital |
|
359,053 |
|
|
|
449,081 |
|
Total assets |
|
600,743 |
|
|
|
648,725 |
|
Accumulated deficit |
|
(583,116 |
) |
|
|
(558,763 |
) |
Total stockholders’ equity |
|
473,538 |
|
|
|
492,956 |
|
NON-GAAP FINANCIAL MEASURES
In addition to reporting financial information
in accordance with U.S. generally accepted accounting principles
(“GAAP”) in this press release, Zymeworks is also reporting
adjusted expenses and adjusted loss per share, which are non-GAAP
financial measures. Adjusted expenses and adjusted loss per share
are not defined by GAAP and should not be considered as
alternatives to net loss, net loss per share or any other indicator
of Zymeworks’ performance required to be reported under GAAP. In
addition, other companies, including companies in our industry, may
calculate similarly titled non-GAAP or adjusted measures
differently or may use other measures to evaluate their
performance, all of which could reduce the usefulness of our
adjusted measures as tools for comparison. Investors and others are
encouraged to review Zymeworks’ financial information in its
entirety and not rely on a single financial measure. As defined by
Zymeworks, adjusted expenses represent total research and
development expenses and general and administrative expenses
adjusted for non-cash stock-based compensation expenses for equity
and liability classified equity instruments as well as expenses
incurred in relation to the restructuring program implemented in
2022. As defined by Zymeworks, adjusted net loss per share – Basic
represents net loss per share – Basic adjusted for non-cash
stock-based compensation expenses for equity and liability
classified equity instruments on a per share basis as well as
restructuring expenses incurred in relation to the restructuring
program implemented in 2022 on a per share basis, and adjusted net
loss per share – Diluted represents net loss per share – Diluted
adjusted for non-cash stock-based compensation expenses for equity
and liability classified equity instruments on a per share basis as
well as restructuring expenses incurred in relation to the
restructuring program implemented in 2022 on a per share basis.
Adjusted expenses are a non-GAAP measure that
Zymeworks believes may be helpful to investors because they provide
consistency and comparability with past financial performance.
GAAP to Non-GAAP Reconciliations
(Expressed in thousands of U.S. dollars except per share
data)(unaudited)
|
Three Months Ended March 31, |
|
2023 |
|
2022 |
|
|
|
|
Research and development expenses |
$ |
45,912 |
|
|
$ |
62,510 |
|
Stock-based compensation (expense) / recovery for equity classified
instruments (*) |
|
(441 |
) |
|
|
2,747 |
|
Stock-based compensation (expense) / recovery for liability
classified instruments (*) |
|
(4 |
) |
|
|
474 |
|
Restructuring (expense) / recovery |
|
— |
|
|
|
(5,542 |
) |
Adjusted research and development expenses (Non-GAAP basis) |
$ |
45,467 |
|
|
$ |
60,189 |
|
|
|
|
|
General and administrative expenses |
$ |
16,947 |
|
|
$ |
12,092 |
|
Stock-based compensation (expense) / recovery for equity classified
instruments (*) |
|
(2,386 |
) |
|
|
2,232 |
|
Stock-based compensation (expense) / recovery for liability
classified instruments (*) |
|
654 |
|
|
|
2,876 |
|
Restructuring (expense) / recovery |
|
— |
|
|
|
(3,935 |
) |
Adjusted general and administrative expenses (Non-GAAP basis) |
$ |
15,215 |
|
|
$ |
13,265 |
|
|
Three Months EndedMarch 31, |
|
2023 |
|
2022 |
|
|
|
|
Net loss per common share – Basic |
$ |
(0.36 |
) |
|
$ |
(1.18 |
) |
Stock-based compensation expense (recovery) per common share |
|
0.03 |
|
|
|
(0.13 |
) |
Restructuring expenses per common share |
|
— |
|
|
|
0.15 |
|
Adjusted net loss per common share – Basic (Non-GAAP basis) |
$ |
(0.33 |
) |
|
$ |
(1.16 |
) |
|
|
|
|
Net loss per common share – Diluted |
$ |
(0.37 |
) |
|
$ |
(1.19 |
) |
Stock-based compensation expense (recovery) per common share |
|
0.03 |
|
|
|
(0.13 |
) |
Restructuring expenses per common share |
|
— |
|
|
|
0.15 |
|
Adjusted net loss per common share – Diluted (Non-GAAP basis) |
$ |
(0.34 |
) |
|
$ |
(1.17 |
) |
(*): Research and development expenses and
general and administrative expenses included $nil stock-based
compensation expense related to the 2022 restructuring during the
three months ended March 31, 2023 ($5,516 recovery for the
three months ended March 31, 2022).
Contacts:
Investor Inquiries: Jack Spinks (604)
678-1388 ir@zymeworks.com Media Inquiries: Diana Papove (604)
678-1388 media@zymeworks.com
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