- 2022 was a year of transformation and change:
- reported $412.5 million in total revenue for the year ended
December 31, 2022;
- reported net income of $124.3 million ($1.90 per fully diluted
share) for 2022 compared to net loss of $211.8 million in
2021;
- reported $492.2 million in cash resources as of December 31,
2022, with expected cash runway through 2026;
- announced positive top-line data for pivotal Phase 2 study of
zanidatamab monotherapy in 2L+ patients with HER2-amplified
advanced biliary tract cancers (BTC);
- presented updated results at ASCO GI, including overall
survival data, for ongoing Phase 2 study of zanidatamab in 1L
patients with HER2-expressing metastatic gastroesophageal
adenocarcinoma (GEA);
- closed significant collaboration for zanidatamab with Jazz
Pharmaceuticals in the fourth quarter, completing a series of
financial transformation initiatives in 2022; and
- discussed new preclinical product candidates at early Research
& Development Day in October 2022 with investigational new drug
(IND) filings for ZW171 and ZW191 on track for 2024.
- Acceptance of 11 submitted abstracts to be presented at AACR in
April 2023 to highlight R&D pipeline.
- Announced recommended Phase 2 dose (RP2D) for Phase 2 studies
of zanidatamab zovodotin scheduled to commence in 2023.
- Will host conference call with management today at 4:30 p.m.
Eastern Standard Time (EST).
Zymeworks Inc. (Nasdaq: ZYME), a clinical-stage biotechnology
company developing novel multifunctional biotherapeutics, today
reported financial results for the fourth quarter and year ended
December 31, 2022 and provided a summary of recent business
highlights.
“As I reflect on the past year as Zymeworks' new Chair and CEO,
we made significant progress across all aspects of our business to
reset the Company and its R&D strategy on a new path forward to
building a successful biotechnology company. We recently outlined
our enterprise value framework where we will continue to focus on
advancing the business across the five pillars during 2023: our two
zanidatamab collaborations with BeiGene and Jazz, our early
research and development programs, zanidatamab zovodotin, and our
legacy platform licensing portfolio,” said Kenneth Galbraith, Chair
and CEO of Zymeworks. “With the transformative nature of the
completed collaboration with Jazz, we believe we are well
positioned to advance all elements of our business during 2023
despite current challenging macroeconomic conditions, with a
significantly reduced cash operating burn and expected cash runway
extending through 2026.”
Recent Highlights and Current Developments
- Completion of Zanidatamab Licensing Agreement with Jazz
Pharmaceuticals During the fourth quarter of 2022, we advanced a
significant licensing and collaboration agreement with Jazz
Pharmaceuticals plc (Jazz) for the exclusive license to develop and
commercialize zanidatamab throughout the world except for those
Asia-Pacific territories previously licensed to BeiGene, Ltd.
Through December 31, 2022, we received $375 million in upfront
payments and are eligible for reimbursement of ongoing
zanidatamab-related costs expended after October 19, 2022. We
remain eligible to receive up to $525 million upon the achievement
of certain regulatory approval milestones and up to $862.5 million
in potential commercial milestone payments, for total potential
payments of up to $1.76 billion. Pending approval of zanidatamab,
we are eligible to receive tiered royalties between 10% and 20% on
Jazz's annual net sales of zanidatamab.
- Zanidatamab Continues to Advance with Multiple Upcoming
Clinical Catalysts HERIZON-GEA-01, a global, pivotal study
evaluating zanidatamab in 1L HER2-positive GEA, continues to enroll
patients with expected top-line data in 2024. Data presented at the
ASCO Gastrointestinal Cancers Symposium in January 2023 showed 84%
overall survival at 18 months in 1L HER2-positive GEA patients
treated with zanidatamab and standard chemotherapy. HERIZON-BTC-01,
a pivotal study evaluating zanidatamab as monotherapy in
previously-treated advanced HER2-amplified BTC patients, reported
positive top-line data that 41.3% of enrolled patients with
HER2-amplified and -expressing (IHC2+ and 3+) disease achieved a
confirmed objective response rate (cORR) and a median duration of
response of 12.9 months as assessed by independent central review.
In conjunction with Jazz, we expect to present the full data set
from HERIZON-BTC-01 at a major medical meeting in the first half of
2023. Zanidatamab was also recently selected for inclusion in the
I-SPY platform trials for patients with HER2-expressing tumors in
neoadjuvant treatment of locally advanced breast cancer, which
continues to explore the potential use of zanidatamab in
indications outside of GEA and BTC.
- Eleven Abstracts Accepted for Presentation at AACR Meeting in
April Zymeworks had 11 abstracts accepted for presentation at the
2023 American Association for Cancer Research (AACR) meeting taking
place April 14-19 in Orlando, Florida. We look forward to sharing
additional information on our preclinical product candidates and
zanidatamab zovodotin. Zymeworks plans to host a conference call
discussing these data in April after the presentation of all
abstracts. Additionally, during 2023 we expect to nominate an
additional preclinical product candidate with a goal of an expected
IND filing by 2025.
- Zanidatamab Zovodotin (ZW49) to Progress in Phase 2 Clinical
Trial With the announcement of the recommended Phase 2 dose (RP2D)
of 2.5 mg/kg every three weeks, development of zanidatamab
zovodotin continues with multiple Phase 2 studies expected to
commence enrollment in 2023. We continue to explore potential
development and commercial collaborations prior to undertaking any
registrational studies of zanidatamab zovodotin, which are expected
to commence before the end of 2025 at the earliest.
5 by 5 Research & Development Strategy
"We have set an ambitious target of generating five novel
product candidates to move into clinical studies over the next five
years, starting with INDs for both ZW171 and ZW191 in 2024," stated
Paul Moore, Ph.D., Chief Scientific Officer at Zymeworks. "With the
capabilities of our platforms and productivity to generate novel
antibody drug conjugate or multispecific antibody product
candidates, we believe we can form new collaborations and
partnerships around additional product candidates in order to
advance further potential best-in-class opportunities with new
external funding."
ZW171, our lead multispecific candidate, is a 2+1 bispecific
antibody designed to co-engage tumor cells and immune cells (T
cells) to enable T cell-mediated killing of tumor cells. ZW171
binds to the tumor target mesothelin (MSLN), which is expressed on
many different tumors including pancreatic, mesothelioma, ovarian,
and other mid to high MSLN-expressing cancers. Our team engineered
and optimized the antibody design by layering our complementary
technologies, including the use of Azymetric™ and EFECT™.
ZW191, our lead antibody-drug conjugate (ADC) candidate, is
engineered to target the folate receptor-alpha protein expressed on
a variety of tumors. ZW191 delivers a cytotoxic chemotherapy,
topoisomerase-1 inhibitor, to these tumor cells to kill the cancer.
Using our Azymetric and Drug Conjugate technologies, our team
customized the monoclonal antibody with enhanced internalization
characteristics in order to potentially target high, mid, and low
levels of folate receptor-alpha expression.
We also continue to have active licensing agreements with key
pharmaceutical and biotechnology partners through our portfolio of
legacy platform licensing agreements. Through this portfolio, we
have received approximately $180 million in the form of
non-refundable upfront and milestone payments to date, excluding
any amounts received for zanidatamab or zanidatamab zovodotin.
During 2023 and 2024, we expect to earn additional milestone
payments under certain of these agreements as products continue to
advance in development. Further, we continue to evaluate the option
of monetizing all of or a portion of our rights to receive future
milestone payments and royalties under these legacy agreements,
should we need additional non-dilutive funding.
Leadership Appointments
During January, we made two key appointments in the clinical
development organization with Jeff Smith, M.D., FRCP, appointed as
Senior Vice President, Early-Stage Development, and Elaina Gartner,
M.D., appointed as Vice President, Late-Stage Development. Dr.
Smith has more than 30 years of drug development experience working
for pharmaceutical, biotechnology and contract research
organizations in Europe and North America, and is based in our new
office in Dublin, Ireland. Dr. Gartner has more than 20 years of
clinical research experience, and has been working with Zymeworks
since 2019 located in our Seattle office.
Financial Results for the Year Ended December 31,
2022
Revenue was $412.5 million in 2022 compared to $26.7 million in
2021. Revenue for 2022 included $375.0 million for license and
technology transfer fees from Jazz, $24.3 million in development
support payments from Jazz, a $5.0 million upfront fee from Atreca,
and $8.2 million from our other partners for research and
development support under cost-sharing arrangements. Revenue for
2021 included $8.0 million from BeiGene for a development
milestone, $8.0 million from Janssen for two development
milestones, $5.0 million from Iconic for partner revenue, and $5.7
million from our partners for research and development support
under cost-sharing arrangements.
Research and development expense was $208.6 million in 2022
compared to $199.8 million in 2021. Research and development
expenses in 2022 included a non-cash stock-based compensation
expense of $2.4 million comprised of a $3.2 million expense from
equity classified awards and a $0.8 million recovery related to the
non-cash mark-to-market revaluation of certain historical liability
classified awards. Excluding stock-based compensation expense and
restructuring, research and development expense increased on a
non-GAAP basis by $16.2 million in 2022 compared to 2021. The
increase related primarily to higher manufacturing expenses of
zanidatamab for process performance qualification activities and
clinical trial expenses for zanidatamab. These were partially
offset by a decrease in expenses related to preclinical activities
as well as a decrease in expenses related to clinical activities
for zanidatamab zovodotin.
We expect research and development expenditures to increase over
time, subject to periodic fluctuations that are in line with the
advancement, expansion, and completion of the clinical development
of our product candidates, as well as our ongoing preclinical
research activities. As of October 19, 2022, Zymeworks is entitled
to reimbursement from Jazz for expenses related to ongoing clinical
studies of zanidatamab under the terms of the collaboration.
General and administrative expense was $73.4 million in 2022
compared to $42.6 million in 2021. In 2022, general and
administrative expense included a non-cash stock-based compensation
expense of $1.2 million comprised of a $4.1 million expense from
equity-classified equity awards and a $2.9 million recovery from
the non-cash mark-to-market revaluation of certain historical
liability-classified equity awards. Excluding stock-based
compensation expense and restructuring, general and administrative
expense increased on a non-GAAP basis by $20.7 million in 2022
compared to 2021. This increase was primarily due to an increase in
consulting fees, professional fees, and depreciation expenses as
well as a non-recurring sales tax refund recognized in 2021, which
partially offset expenses in the same period in 2021. The increase
in expenses during 2022 were partially offset by a decrease in
salaries and benefits expense as a result of a decrease in
headcount due to our restructuring program.
Net income was $124.3 million in 2022 compared to net loss of
$211.8 million in 2021. The increase in net income was primarily
due to revenue from our collaboration agreement with Jazz, which
was partially offset by both higher research and development
expense and general and administrative expense as well as an
increase in income tax expense.
"2022 was a very exciting year for Zymeworks as we reported
annual net income of approximately $124 million, a substantially
improved financial position, and a runway that allows for
sufficient flexibility to fund our research and development and
operating activities until at least 2026 and potentially beyond,"
said Chris Astle, Ph.D., Senior Vice President and Chief Financial
Officer of Zymeworks. "We will continue to take a measured and
cautious approach to our operating spend as we develop an exciting
and broad portfolio of product candidates over the coming years.
With continued R&D expenses for zanidatamab subject to
reimbursement from Jazz, the vast majority of our net R&D
spending going forward is related to the preclinical product
portfolio with an additional staged investment in Phase 2 clinical
studies for zanidatamab zovodotin."
As of December 31, 2022, Zymeworks had $492.2 million in cash
resources consisting of cash, cash equivalents and short-term
investments. 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. Further, with a substantially
improved financial position and reduced cash burn rate, we have
provided additional financial guidance to allow for an improved
understanding of our future planned spending. For the calendar year
2023, we 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 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, including the expected presentation of
full results from HERIZON-BTC-01 in 2023 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, including anticipated payments from
Jazz, to fund Zymeworks’ planned operations through at least 2026,
and potentially beyond; 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 regarding its financial
condition or future financial performance may be incorrect;
Zymeworks may not recognize the anticipated cost savings and
related benefits of its 2022 reduction in workforce; 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 Annual Report on Form 10-K
for its year ended December 31, 2022 (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.
Consolidated Statements of Income
(Loss) and Comprehensive Income (Loss)
(Expressed in thousands of U.S. dollars
except share and per share data)
Three Months Ended December
31,
Year Ended December
31,
2022
2021
2022
2021
(unaudited)
(unaudited)
Revenue
Research and development
collaborations
$
402,493
$
19,870
$
412,482
$
26,680
Operating expenses:
Research and development
52,967
54,865
208,596
199,752
General and administrative
30,131
5,854
73,358
42,561
Total operating expenses
83,098
60,719
281,954
242,313
Income (loss) from operations
319,395
(40,849
)
130,528
(215,633
)
Other income, net
1,041
326
4,706
3,274
Income (loss) before income taxes
320,436
(40,523
)
135,234
(212,359
)
Income tax (expense) recovery, net
(11,005
)
1,371
(10,893
)
516
Net income (loss) and comprehensive
loss
$
309,431
$
(39,152
)
$
124,341
$
(211,843
)
Net income (loss) per common share:
Basic
$
4.65
$
(0.76
)
$
1.91
$
(4.11
)
Diluted
$
4.65
$
(0.95
)
$
1.90
$
(4.61
)
Weighted-average common stock
outstanding:
Basic
66,510,825
51,841,032
65,194,775
51,553,869
Diluted
66,565,937
52,226,549
65,249,184
52,131,596
ZYMEWORKS INC.
Selected Consolidated Balance Sheet
Data
(Expressed in thousands of U.S.
dollars)
December 31,
2022
December 31,
2021
Cash, cash equivalents and short-term
investments
$
492,232
$
252,608
Working capital
449,081
216,367
Total assets
648,725
389,132
Accumulated deficit
(558,763
)
(683,104
)
Total stockholders’ equity
492,956
249,094
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 December
31,
Year Ended December
31,
2022
2021
2022
2021
Research and development expenses
$
52,967
$
54,865
$
208,596
$
199,752
Stock-based compensation (expense) /
recovery for equity classified instruments (*)
(1,724
)
(4,401
)
(3,174
)
(20,090
)
Stock-based compensation (expense) /
recovery for liability classified instruments (*)
9
1,461
781
4,646
Restructuring (expense) / recovery
482
—
(5,659
)
—
Adjusted research and development expenses
(Non-GAAP basis)
$
51,734
$
51,925
$
200,544
$
184,308
General and administrative expenses
$
30,131
$
5,854
$
73,358
$
42,561
Stock-based compensation (expense) /
recovery for equity classified instruments (*)
(2,580
)
(3,924
)
(4,102
)
(18,184
)
Stock-based compensation (expense) /
recovery for liability classified instruments (*)
(117
)
8,753
2,893
23,758
Restructuring expense
(476
)
—
(3,265
)
—
Adjusted general and administrative
expenses (Non-GAAP basis)
$
26,958
$
10,683
$
68,884
$
48,135
Three Months Ended December
31,
Year Ended December
31,
2022
2021
2022
2021
Net income (loss) per common share –
Basic
$
4.65
$
(0.76
)
$
1.91
$
(4.11
)
Stock-based compensation expense
(recovery) per common share
0.06
(0.04
)
0.05
0.19
Restructuring expenses per common
share
—
—
0.14
—
Adjusted net income (loss) per common
share – Basic (Non-GAAP basis)
$
4.71
$
(0.80
)
$
2.10
$
(3.92
)
Net income (loss) per common share –
Diluted
$
4.65
$
(0.95
)
$
1.90
$
(4.61
)
Stock-based compensation expense
(recovery) per common share
0.06
(0.04
)
0.05
0.19
Restructuring expenses per common
share
—
—
0.14
—
Adjusted net income (loss) per common
share – Diluted (Non-GAAP basis)
$
4.71
$
(0.99
)
$
2.09
$
(4.42
)
(*): Research and development expenses and
general and administrative expenses include stock-based
compensation recovery related to the restructuring of $5,516 and
$4,865, respectively, for the year ended December 31, 2022 (nil for
the three months ended December 31, 2022).
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230307005535/en/
Investor Inquiries: Jack Spinks Director, Investor Relations
(604) 678-1388 ir@zymeworks.com
Media Inquiries: Diana Papove Director, Corporate Communications
(604) 678-1388 media@zymeworks.com
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