VANCOUVER, British Columbia–(BUSINESS WIRE)–Zymeworks Inc. (NYSE/TSX: ZYME), a clinical-stage biopharmaceutical
company developing multifunctional therapeutics, today reported
financial results for the first quarter ended March 31, 2019.
“We are pleased to have advanced both of our lead assets to the next
stages of clinical development; recently commencing a Phase 2 study for
ZW25 and starting enrollment in the Phase 1 clinical trial for our
antibody-drug conjugate, ZW49,” said Ali Tehrani, Ph.D., Zymeworks’
President & CEO. “Accordingly, we have also expanded our leadership
team, adding experienced executives with critical competencies needed to
facilitate the development and approval of our clinical-stage assets. We
believe we are now well-positioned to deliver on our ambitious clinical
goals throughout 2019 and beyond.”
First Quarter 2019 Business Highlights and Recent Developments
-
Phase 2 Clinical Trial Begins for ZW25 in First-Line
HER2-Expressing Metastatic Gastroesophageal Cancers
The Phase
2 trial is evaluating ZW25 in combination with standard of care (SOC)
chemotherapy for the first-line treatment of HER2-positive metastatic
gastroesophageal cancers. This trial is intended to support a
potential first-line registrational trial and could position ZW25 as a
new SOC.
-
Phase 1 ZW49 Clinical Study Open and Enrolling Patients
Enrollment
is underway in the United States for the Phase 1 clinical trial
of ZW49, Zymeworks’ novel bispecific HER2-targeted antibody-drug
conjugate. The objectives of this study are to evaluate safety and
early anti-tumor activity as well as establish a recommended dose for
future clinical trials.
-
Three Experienced Development Executives Added to Management Team
Zymeworks
expanded its leadership team and added key functional expertise to
support the development of its maturing clinical pipeline. The newly
created positions include Neil Josephson, M.D., Vice President,
Clinical Research; Bruce Hart, Ph.D., Vice President, Regulatory
Affairs; and Mark Hollywood, Senior Vice President, Technical and
Manufacturing Operations.
-
Eli Lilly and Daiichi Sankyo Programs Advance Toward Clinical
Testing
Zymeworks’ partner, Eli Lilly, filed an
Investigational New Drug Application for its second Azymetric™
program, triggering a US$8.0 million payment to Zymeworks. In
addition, Daiichi Sankyo recently exercised its option for a
commercial license to an immuno-oncology bispecific built using
Zymeworks’ Azymetric and EFECT™ platforms. Zymeworks will receive a
US$3.5 million payment.
Financial Results for the Quarter Ended March 31, 2019
Revenue for the three months ended March 31, 2019 was $11.9 million as
compared to $0.04 million in the same period of 2018. Revenue for 2019
includes an $8.0 million development milestone payment upon Lilly’s
submission of an investigational new drug application, $3.5 million of
recognized deferred revenue from our licensing and collaboration
agreement with BeiGene, as well as $0.4 million in other research
support payments. Revenue for the same period in 2018 was $0.04 million,
consisting of research support payments.
For the three months ended March 31, 2019, research and development
expenses were $17.5 million as compared to $13.1 million in the first
three months of the prior year. The change was primarily due to an
increase in clinical trial activity and associated drug manufacturing
costs for ZW25, as well as an increase in other research and discovery
activities as compared to the same period in 2018. Research and
development expenses also included non-cash stock-based compensation
expense of $1.1 million from equity classified equity awards and $0.4
million expense related to the non-cash mark-to-market revaluation of
certain historical liability classified equity awards.
For the three months ended March 31, 2019, general and administrative
expenses were $9.0 million as compared to $7.1 million in the first
quarter of 2018. The change was primarily due to an increase in employee
compensation expenses from increased head count in 2019 over 2018,
including non-cash stock-based compensation, as well as other increases
in professional fees associated with year-over-year corporate growth.
General and administrative expenses included non-cash stock-based
compensation expense of $1.5 million from equity classified equity
awards and $1.3 million expense related to the non-cash mark-to-market
revaluation of certain historical liability classified equity awards.
The net loss for the three months ended March 31, 2019, was
$13.6 million as compared to $21.2 million in the same period of 2018.
This was primarily due to increased revenue, interest income and 2018
warrant valuation expense, which was not relevant for 2019, that offset
an increase in research and development expenses associated with our
lead therapeutic candidates and other programs as well as general and
administrative expenses.
Zymeworks expects research and development expenditures to increase over
time in line with the advancement and expansion of the Company’s
clinical development of its product candidates, as well as its ongoing
preclinical research activities. Additionally, Zymeworks anticipates
continuing to receive revenue from its existing and future strategic
partnerships, including technology access fees and milestone-based
payments. However, Zymeworks’ ability to receive these payments is
dependent upon either Zymeworks or its collaborators successfully
completing specified research and development activities.
As of March 31, 2019, Zymeworks had $180.3 million in cash and cash
equivalents and short-term investments.
About Zymeworks Inc.
Zymeworks is a clinical-stage biopharmaceutical company dedicated to the
development of next-generation multifunctional biotherapeutics. The
Company’s suite of therapeutic platforms and its fully integrated drug
development engine enable precise engineering of highly differentiated
product candidates. Zymeworks’ lead clinical candidate, ZW25, is a novel
Azymetric™ bispecific antibody currently in Phase 2 clinical
development. The Company’s second clinical candidate, ZW49, is a
bispecific antibody-drug conjugate currently in Phase 1 clinical
development and combines the unique design and antibody framework of
ZW25 with Zymeworks’ proprietary ZymeLink™ cytotoxic payload. Zymeworks
is also advancing a deep preclinical pipeline in immuno-oncology and
other therapeutic areas. In addition, its therapeutic platforms are
being leveraged through multiple strategic partnerships with eight
global biopharmaceutical companies. For more information, visit www.zymeworks.com.
Cautionary Note Regarding Zymeworks’ 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,
statements that relate to potential payments and/or royalties payable to
Zymeworks under its corporate agreements, the speed and outcome of drug
development plans, ZW25’s ability to be approved and become a
standard-of-care treatment for certain types of cancer, Zymeworks’
potential global growth, and other information that is not historical
information. When used herein, words and phrases such as “enable”,
“will”, “may”, “expect”, “anticipate”, “eligible to”, 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, market conditions and the factors
described under “Risk Factors” in Zymeworks’ Quarterly Report on Form
10-Q for its quarter ended March 31, 2019 (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.
ZYMEWORKS INC.
Condensed Interim Consolidated Statements
of Loss
(Expressed in thousands of U.S. dollars except share
and per share data)
| Three Months Ended March 31, | |||||
| 2019 | 2018 | ||||
| (unaudited) | (unaudited) | ||||
| Revenue | |||||
| Research and developmental collaborations | $ 11,925 | $ 40 | |||
| Operating expenses | |||||
| Research and development | 17,475 | 13,085 | |||
| General and administrative | 9,003 | 7,066 | |||
| Total operating expenses | 26,478 | 20,151 | |||
| Loss from operations | (14,553) | (20,111) | |||
| Other income (expense), net | 1,105 | (1,158) | |||
| Loss before income taxes | (13,448) | (21,269) | |||
| Income tax (expense) recovery, net | (193) | 65 | |||
| Net loss | $ (13,641) | $ (21,204) | |||
| Net loss per common share: | |||||
| Basic | $ (0.43) | $ (0.83) | |||
| Diluted | $ (0.43) | $ (0.83) | |||
| Weighted-average common shares outstanding: | |||||
| Basic | 32,020,437 | 25,459,150 | |||
| Diluted | 32,020,437 | 25,459,150 | |||
ZYMEWORKS INC.
Selected Condensed Consolidated Balance
Sheet Data
(Expressed in thousands of U.S. dollars)
|
March 31, |
December 31,
2018 |
||||
| Cash, cash equivalents and short-term investments | $ 180,308 | $ 200,164 | |||
| Working capital | 162,174 | 174,383 | |||
| Total assets | 238,279 | 244,363 | |||
| Accumulated deficit | (158,913) | (145,272) | |||
| Total shareholders’ equity | 170,007 | 180,490 | |||
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 normalized expenses and normalized loss per
share, which are non-GAAP financial measures. Normalized expenses and
normalized 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, Zymeworks’ definitions of normalized expenses and
normalized loss per share may not be comparable to similarly titled
non-GAAP measures presented by other companies. 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,
normalized 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.
Normalized expenses are a non-GAAP measure that Zymeworks believes is
useful because it excludes those items that Zymeworks believes are not
representative of Zymeworks’ operating expenses.
GAAP to Non-GAAP Reconciliations
(Expressed in thousands
of U.S. dollars except share and per share data)
(unaudited)
|
Three Months Ended
March 31, |
||||||||
| 2019 | 2018 | |||||||
| Research and development expenses | $ 17,475 | $ 13,085 | ||||||
| Stock based compensation for equity classified instruments | (1,127 | ) | (416 | ) | ||||
| Stock based compensation for liability classified instruments | (420 | ) | (776 | ) | ||||
| Normalized research and development expenses (Non-GAAP basis) | 15,928 | 11,893 | ||||||
| General and administrative expenses | 9,003 | 7,066 | ||||||
| Stock based compensation for equity classified instruments | (1,490 | ) | (591 | ) | ||||
| Stock based compensation for liability classified instruments | (1,326 | ) | (1,676 | ) | ||||
| Normalized general and administrative expenses (Non-GAAP basis) | $ 6,187 | $ 4,799 | ||||||
|
Three Months Ended
March 31, |
||||||||
| 2019 | 2018 | |||||||
| Net loss per common share – Basic | $ (0.43 | ) | $ (0.83 | ) | ||||
| Stock based compensation for equity classified instruments | 0.08 | 0.04 | ||||||
| Stock based compensation for liability classified instruments | 0.05 | 0.10 | ||||||
| Normalized net loss per common share – Basic (Non-GAAP basis) | (0.30 | ) | (0.69 | ) | ||||
| Net loss per common share – Diluted | (0.43 | ) | (0.83 | ) | ||||
| Stock based compensation for equity classified instruments | 0.08 | 0.04 | ||||||
| Stock based compensation for liability classified instruments | 0.05 | 0.10 | ||||||
| Normalized net loss per common share – Diluted (Non-GAAP basis) | $ (0.30 | ) | $ (0.69 | ) | ||||
Contacts
Zymeworks Inc.
Investor Inquiries:
Ryan Dercho, Ph.D.
(604) 678-1388
ir@zymeworks.com
Tiffany Tolmie
(604) 678-1388
ir@zymeworks.com
Media Inquiries:
Angela Bitting
(925) 202-6211
a.bitting@comcast.net