Financial Highlights

For the full year 2023, Zymeworks reported a net loss of $118.7 million and revenue of $76.0 million. The company's annual operating cash flow was -$118.3 million, and its annual free cash flow was -$122.4 million.

In the second quarter of 2024, Zymeworks reported revenue of $19.2 million, compared to $7.0 million in the same period of 2023. The increase in revenue was primarily due to $10.8 million in development support and drug supply revenue from Jazz Pharmaceuticals, $8.0 million in milestone revenue from BeiGene, and $0.4 million from BeiGene for research support payments.

The company's net loss for the second quarter of 2024 was $37.7 million, compared to a net loss of $51.2 million in the same period of 2023. The decrease in net loss was primarily due to lower research and development and general and administrative expenses, which was partially offset by a decrease in revenue and an impairment charge recognized in 2024 related to the discontinuation of the zanidatamab zovodotin clinical development program.

As of June 30, 2024, Zymeworks had $395.9 million in cash resources, consisting of $70.9 million in cash and cash equivalents and $325.0 million in marketable securities. The company expects its existing cash resources, combined with anticipated regulatory milestone payments, to fund its planned operations into the second half of 2027.

Business Overview

Zymeworks is a global clinical-stage biotechnology company committed to the discovery, development, and commercialization of novel, multifunctional biotherapeutics. The company's mission is to make a meaningful difference in the lives of people impacted by difficult-to-treat cancers and other 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. The company's proprietary capabilities and technologies include several modular, complementary therapeutic platforms that can be used in combination with each other and with existing approaches.

Zanidatamab

Zanidatamab, Zymeworks' lead product candidate, is a novel bispecific antibody that targets two distinct domains of the human epidermal growth factor receptor 2 (HER2). Zanidatamab's unique binding properties result in multiple mechanisms of action that may enable it to address unmet need in patient populations with HER2-expressing cancers. Zymeworks has entered into separate agreements with BeiGene, Ltd. and Jazz Pharmaceuticals Ireland Limited, granting each exclusive rights to develop and commercialize zanidatamab in different territories.

In May 2024, Jazz announced that the FDA accepted and granted Priority Review of the Biologics License Application (BLA) for zanidatamab for the treatment of previously treated, unresectable, locally advanced, or metastatic HER2-positive biliary tract cancers (BTC). Under the Prescription Drug User Fee Act (PDUFA), the FDA has set a target action date of November 29, 2024. Additionally, the European Medicines Agency (EMA) has validated the Marketing Authorization Application (MAA) for zanidatamab in second-line BTC, and the Center for Drug Evaluation (CDE) of the National Medical Products Administration (NMPA) in China has accepted the BLA for zanidatamab for second-line treatment of HER2-positive BTC.

Beyond zanidatamab, Zymeworks is rapidly advancing a deep pipeline of product candidates based on its experience and capabilities in both antibody-drug conjugates and multispecific antibody therapeutics across multiple novel targets in indications that represent areas of significant unmet medical need. The company has received FDA clearance for the investigational new drug (IND) applications for ZW171, a novel 2+1 T-cell targeting bispecific antibody for mesothelin-expressing cancers, and ZW191, a differentiated folate receptor-α targeting antibody-drug conjugate.

Zymeworks' Early-Stage Pipeline

Following a strategic review of its emerging wholly-owned pipeline, Zymeworks decided to discontinue the clinical development program of its HER2-targeted antibody-drug conjugate, zanidatamab zovodotin, to focus on the development of its early-stage programs, which the company believes have the potential to be best-in-class and/or first-in-class drugs.

ZW191 is a differentiated product candidate that targets folate receptor-α (FRα)-expressing tumors, including ovarian and other gynecological cancers, as well as non-small cell lung cancer (NSCLC). Preclinical data has demonstrated robust anti-tumor activity and a favorable tolerability profile for ZW191.

ZW171 is a novel 2+1 format T-cell engaging multispecific antibody targeting mesothelin (MSLN)-expressing cancers, such as ovarian cancer, mesothelioma, and NSCLC. Preclinical data has shown in vivo anti-tumor activity, with engagement in high-expressing cells but not low-expressing cells, mitigating the risk of on-target, off-tumor toxicities.

Zymeworks expects to initiate clinical development of both ZW171 and ZW191 during 2024 and is actively progressing applications seeking regulatory permission to commence first-in-human clinical studies for these product candidates in non-U.S. jurisdictions in the second half of 2024.

The company's early-stage pipeline also includes ZW220, an antibody-drug conjugate targeting sodium-dependent phosphate transporter 2b (NaPi2b)-expressing NSCLC and ovarian cancer, and ZW251, a potential first-in-class antibody-drug conjugate molecule designed for the treatment of glypican 3 (GPC3)-expressing hepatocellular carcinoma (HCC). Zymeworks expects to submit IND applications for ZW220 and ZW251 in 2025.

Therapeutic Platforms and Partnerships

Zymeworks' proprietary therapeutic platforms, including Azymetric, EFECT, and drug conjugate platforms, have enabled the company to enter into several strategic partnerships with global biopharmaceutical companies. These partnerships have provided Zymeworks with non-dilutive funding, as well as access to proprietary therapeutic assets, which have increased the company's ability to rapidly advance its product candidates.

Through collaboration agreements with Jazz and BeiGene, Zymeworks has received over $435 million in non-refundable upfront payments and milestone payments related to the development and commercialization of zanidatamab. Additionally, the company remains eligible to receive up to $1.56 billion in potential regulatory, development, and commercial milestone payments, as well as tiered royalties on potential future product sales, pending receipt of regulatory approval.

Zymeworks also has revenue-generating strategic partnerships and collaborations with Celgene Corporation and Celgene Alpine Investment Co. LLC (now a Bristol-Myers Squibb company), GlaxoSmithKline Intellectual Property Development Limited, Daiichi Sankyo Co., Ltd., Janssen Biotech, Inc., Iconic Therapeutics, Inc., and Merck Sharp & Dohme Research GmbH.

Risks and Challenges

Zymeworks faces several risks and challenges common to the biotechnology industry, including the inherent uncertainty of clinical development, the potential for its product candidates to fail in development, the need for regulatory approvals, and competition from other therapies. The company also faces the risk of being unable to maintain or enter into new strategic partnerships, which could impact its ability to fund and advance its pipeline.

Additionally, Zymeworks is subject to various legal and regulatory requirements, including healthcare laws and regulations, which could expose the company to criminal sanctions, civil penalties, and reputational harm if it fails to comply.

Outlook and Conclusion

Zymeworks is well-positioned to continue advancing its diverse pipeline of novel biotherapeutics, with a strong financial position and several upcoming milestones. The company's focus on developing best-in-class and first-in-class drug candidates, coupled with its strategic partnerships and proprietary therapeutic platforms, suggests a promising future for Zymeworks and its ability to make a meaningful difference in the lives of patients with difficult-to-treat diseases.