- Opportunistic proposal from activist shareholder
substantially undervalues Zymeworks and is not in the best
interests of shareholders
- Shareholders are right to question the motive behind an
activist proposal that was concurrently released to the media and
sent to the company without any previous engagement on the
subject
- Management reiterates focus on execution of plan to lead the
next wave of novel antibody drug conjugates and multispecific
antibody therapeutics for oncology
- Company remains focused on the development of its two
clinical stage assets, zanidatamab and ZW49, with multiple expected
data catalysts over the course of 2022 and 2023
Zymeworks Inc. (NYSE: ZYME), a clinical-stage biopharmaceutical
company developing next-generation multifunctional biotherapeutics,
today announced that its Board of Directors, after thorough
consultation with its financial and legal advisors, unanimously
determined that the unsolicited, opportunistic, non-binding
proposal from an activist shareholder, All Blue Falcons FZE (“All
Blue”), and its affiliates to purchase Zymeworks for $10.50 per
share substantially undervalues Zymeworks and is not in the best
interest of the Company and its shareholders.
Following a comprehensive review of the unsolicited,
opportunistic, non-binding proposal, including independent analyses
completed by external financial advisors engaged by Zymeworks, the
Board of Directors has determined that the proposal significantly
undervalues its prospects related to the Company’s long-term
business strategy and potential commercial opportunities. In
addition, the non-binding proposal lacks credibility by offering no
information regarding potential sources of funding or any details
on their ability to consummate such a transaction. As a result, the
Board of Directors of Zymeworks has determined that it would not be
appropriate to enter into discussions in response to the current
proposal at a price of $10.50 per share.
“This non-binding, unsolicited activist proposal was timed
opportunistically during a period of substantial market
dislocation, and prior to several important near-term events for
the Company expected in 2022. We are confident that the execution
of our key strategic priorities has the potential to deliver
greater value to our shareholders than the current inadequate and
non-binding proposal,” said Kenneth Galbraith, Chair & CEO of
Zymeworks.
While the Company is under no obligation to respond to All
Blue’s proposal given its non-binding and informal nature, the
Board feels that it is appropriate to provide this information to
the market.
Lota Zoth, Zymeworks’ Lead Independent Director, commented, “We
welcome constructive engagement with, and input from, all of our
shareholders. The Board remains fully committed to doing whatever
is in the best interests of the Company and all shareholders.”
Reflecting on Zymeworks’ current strategic priorities, Mr.
Galbraith said, “Since being appointed as Chair and CEO in January,
we have moved quickly to reset and focus on key priorities,
including improving our financial position, the formation of new
partnerships and collaborations, accelerating enrollment of our two
ongoing pivotal trials for zanidatamab, reporting data catalysts
for both zanidatamab and ZW49, and showcasing new product
candidates developed from our novel platforms. As discussed in our
recent Q1 earnings call, we continue to make excellent progress
towards our key strategic priorities for 2022 and 2023 and are
confident our plan will create significant long-term value for all
shareholders.”
Zymeworks is on the Right Track to Create Meaningful Value
for All Shareholders
The Company’s previously-announced key strategic priorities for
2022 and 2023 remain as follows:
- Fully recruit the HERIZON-BTC-01 pivotal clinical study for
zanidatamab by mid-2022, which was completed in April 2022.
Top-line data from the trial is expected by early 2023;
- Fully recruit the HERIZON-GEA-01 pivotal clinical study for
zanidatamab by the end of 2023. Upcoming clinical data for
zanidatamab in first-line HER2-positive gastroesophageal
adenocarcinomas and first-line HER2-positive breast cancer will be
presented at the ASCO Annual Meeting, being held from June 3-6,
2022;
- Complete or close out other ongoing early-stage clinical
studies for zanidatamab as data become available, and use these
data to identify and support strategic decisions regarding future
clinical development opportunities beyond the ongoing pivotal
clinical studies;
- Finalize a clear clinical development path for ZW49 based on
additional clinical data expected in 2022 from the ongoing Phase 1
clinical trial, and present updated clinical data for ZW49 at a
major medical meeting in the second half of 2022;
- Select and advance at least two new antibody-drug conjugate or
multispecific product candidates leveraging Zymeworks’ novel,
therapeutic platforms (Azymetric™, ZymeLink™, EFECT™ and ProTECT™)
to provide the ability to submit two Investigational New Drug (IND)
applications before the end of 2024;
- Execute on new partnerships and collaborations to support the
development and commercialization of zanidatamab, ZW49 and
Zymeworks’ early-stage R&D pipeline and technology
platforms;
- Continue to support and advance Zymeworks’ core technology
platforms and collaborations; and
- Improve Zymeworks’ financial position over 2022 and 2023
through a combination of alternatives, including forming additional
partnerships and collaborations, monetizing existing assets and
products, and securing additional financing.
Activist Background to the All Blue Proposal
In late January 2022, All Blue sent a number of letters to the
Board voicing its displeasures on various matters. Specifically, on
January 24, All Blue expressed its displeasure regarding a rejected
financing proposal presented by All Blue. This was followed by
another letter on January 27, where All Blue expressed concern
regarding the Company’s public offering launched on January 26,
which successfully closed on January 31, 2022, resulting in net
proceeds to the Company of $107.5 million. In a subsequent email
following a meeting with members of the Board, All Blue called for
Zymeworks directors to “immediately resign without delay” and
threatened to initiate “a very public fight.” On April 28, 2022,
the Company received an unsolicited, non-binding proposal from All
Blue, which revealed its 5.9% stake in Zymeworks. The Board and
management are disappointed that All Blue chose to publicly attack
the Company while efforts to reinvigorate the Company are well
underway, including completing recruitment of the HERIZON-BTC-01
study ahead of guidance, optimizing its operating expense structure
to extend financial runway, and completing a comprehensive
realignment of its workforce ahead of previous guidance.
Zymeworks looks forward to its continued engagement with its
shareholders as it focuses on leading the emerging wave of novel
multifunctional biologics development in oncology.
Advisors
Goldman Sachs & Co. LLC and MTS Health Partners, LP are
serving as financial advisors, Blake, Cassels & Graydon LLP and
Wilson Sonsini Goodrich & Rosati are acting as legal counsel,
and Kingsdale Advisors is acting as strategic shareholder and
communications advisor to Zymeworks.
About Zymeworks Inc.
Zymeworks is a clinical-stage biopharmaceutical company
dedicated to the discovery, development and commercialization of
next-generation multifunctional biotherapeutics. Zymeworks’ suite
of therapeutic platforms and its fully integrated drug development
engine enable precise engineering of highly differentiated product
candidates. Zymeworks’ lead clinical candidate, zanidatamab, is a
novel Azymetric™ HER2-targeted bispecific antibody currently being
evaluated in multiple Phase 1, Phase 2, and pivotal clinical trials
globally as a targeted treatment option for patients with solid
tumors that express HER2. Zymeworks’ second clinical candidate,
ZW49, is a novel bispecific HER2‑targeted antibody-drug conjugate
currently in Phase 1 clinical development and combines the unique
design and antibody framework of zanidatamab with Zymeworks’
proprietary ZymeLink™ linker and cytotoxin. Zymeworks is also
advancing a deep preclinical pipeline in oncology (including
immuno-oncology agents) and other therapeutic areas. In addition,
its therapeutic platforms are being leveraged through strategic
partnerships with global biopharmaceutical companies. For more
information on our ongoing clinical trials visit
www.zymeworksclinicaltrials.com. For additional 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” within
the meaning of the U.S. Private Securities Litigation Reform Act of
1995 and “forward-looking information” within the meaning of
Canadian securities laws, or collectively, forward-looking
statements. Forward-looking statements in this news release
include, but are not limited to, the potential therapeutic effects
of zanidatamab and Zymeworks’ other product candidates; Zymeworks’
clinical development of its product candidates and the related
clinical trials; the commercial potential of technology platforms
and product candidates; Zymeworks’ preclinical pipeline; statements
that relate to Zymeworks’ expectations regarding implementation of
its strategic priorities and the potential for significant
long-term value creation for shareholders; anticipated clinical
data presentations; expected financial performance and future
financial position; Zymeworks’ ability to execute new
collaborations and partnerships; potential financing efforts;
current and future partnerships and strategic collaborations;
interactions with regulators, including anticipated future IND
submissions; timing of milestones with respect to zanidatamab, ZW49
and other potential product candidates; guidance relating to
anticipated timing of and results from ongoing and planned clinical
trials and the reporting of related data; the ability to advance
product candidates into later stages of development; and other
information that is not historical information. When used herein,
words such as “will”, “plan”, “may”, “believe”, “expect”,
“continue”, “anticipate”, “potential”, “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: 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; 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; regulatory agencies may impose additional
requirements or delay the initiation of clinical trials; the impact
of new or changing laws and regulations; market conditions;
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, 2022 (a copy of which may be
obtained at www.sec.gov and www.sedar.com). Consequently,
forward-looking statements should be regarded solely as Zymeworks’
current plans, estimates and beliefs. Investors should not place
undue reliance on forward-looking statements. Zymeworks cannot
guarantee future results, events, levels of activity, performance
or achievements. Zymeworks does not undertake and specifically
declines any 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, except as may be required by law.
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version on businesswire.com: https://www.businesswire.com/news/home/20220520005056/en/
Investor Inquiries: Jack Spinks (604) 678-1388 ir@zymeworks.com
Media Inquiries: Diana Papove (604) 678-1388
media@zymeworks.com
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