Zymeworks(ZYME) - 2025 Q2 - Quarterly Results

Corporate Update and Second Quarter 2025 Financial Results Management Commentary and Strategic Outlook The company is leveraging partnership revenue to offset R&D costs and shifting its strategy to focus on long-term cash flow from zanidatamab royalties - Strategic partnerships have validated the Azymetric platform and generated meaningful revenue, helping to offset R&D cash burn[3] - The company expects to have three product candidates in active Phase 1 trials in the second half of 2025: ZW171, ZW191, and ZW251[3] - Zymeworks is shifting its business strategy to focus on anticipated royalty and milestone streams from zanidatamab (Ziihera®) as a long-term source of positive cash flow[3][5] - Topline data from the pivotal HERIZON-GEA-01 study is expected in the fourth quarter of 2025[3] Second Quarter 2025 Highlights The quarter featured key regulatory approvals for ZW251 and zanidatamab, strong partnership revenue, and an extended cash runway into late 2027 - The FDA cleared the Investigational New Drug (IND) application for ZW251, with first-in-human studies planned to start in 2025[4] - Zanidatamab received approval in China and Europe for 2nd-line HER2-positive biliary tract cancer (BTC), expanding patient access[4] | Metric | Value (Q2 2025) | | :--- | :--- | | Revenue | $48.7 million | | Ziihera® Net Product Sales (by Jazz) | $5.5 million | | Cash Resources (as of June 30, 2025) | $333.4 million | | Projected Cash Runway | Into 2H-2027 | Research and Development Progress The R&D pipeline advanced with positive preclinical data, ongoing trials, new regulatory clearances, and progress in key partnership programs Wholly-Owned R&D Programs The wholly-owned pipeline advanced with promising preclinical data for ZW1528 and FDA clearance for ZW251 to enter clinical trials - Presented new preclinical data for ZW1528 (IL-4Rα x IL-33 bispecific) showing high-affinity binding, effective signaling blockade, and in vivo efficacy in lung inflammation models[6][8] - Presented trial-in-progress posters for ZW171 at ASCO and ZW191 at the ESMO Gynaecological Cancers Congress, detailing their respective Phase 1 studies[6][7] - The FDA cleared the IND application for ZW251, a GPC3-targeting antibody-drug conjugate, with Phase 1 clinical studies planned to commence in 2025[8] Zanidatamab Program Updates The zanidatamab program achieved key milestones including positive long-term survival data and regulatory approvals in China and Europe - Long-term data from a Phase 2 trial of zanidatamab in combination with chemotherapy for 1L HER2+ mGEA showed a median overall survival (OS) of 36.5 months[10] - Received conditional approval from the NMPA in China for HER2+ BTC, triggering a $20.0 million milestone payment from partner BeOne Medicines[11] - The European Commission granted conditional marketing authorization for Ziihera® (zanidatamab) for HER2+ BTC[12] - Royalty revenue from partners Jazz and BeOne was $0.6 million for Q2 2025, based on $5.5 million in net product sales of Ziihera® by Jazz[13] Platform Collaboration Agreements Collaborations generated significant revenue and yielded positive clinical data, validating the company's technology platforms - Recognized $7.5 million in revenue after BMS exercised its commercial license option under a 2014 collaboration agreement[14] - Partner J&J reported positive Phase 1 results for pasritamig, which demonstrated preliminary anti-tumor activity and a favorable safety profile in prostate cancer patients[15] - Partner Daiichi Sankyo presented a trial-in-progress poster for a Phase 1 study of DS-2243, a bispecific T-cell engager[16] Financial Performance Analysis The company achieved a significant financial turnaround to net income in Q2 2025, driven by increased partnership revenue Key Financial Results for Q2 2025 The company reported total revenue of $48.7 million and a net income of $2.3 million, a significant turnaround from the prior year | Financial Metric (in millions USD) | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Total Revenue | $48.7 | $19.2 | +153.4% | | R&D Expenses | $34.4 | $29.2 | +17.8% | | G&A Expenses | $15.0 | $15.7 | -4.5% | | Net Income (Loss) | $2.3 | $(37.7) | Turnaround to Profit | - The revenue increase was primarily driven by a $20.0 million milestone from BeOne, recognition of $18.3 million in related deferred revenue, and a $7.5 million payment from BMS[17] - The company's cash resources of $333.4 million, combined with anticipated regulatory milestones, are expected to fund planned operations into the second half of 2027[20] Consolidated Financial Statements This section presents the unaudited condensed interim consolidated statements of income and balance sheet data Condensed Consolidated Statements of Income (Loss) (in thousands USD) | | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | Revenue | $48,726 | $19,243 | | Total operating expenses | $49,400 | $62,129 | | Loss from operations | $(674) | $(42,886) | | Net income (loss) | $2,317 | $(37,686) | | Basic EPS | $0.03 | $(0.49) | | Diluted EPS | $0.03 | $(0.49) | Selected Condensed Consolidated Balance Sheet Data (in thousands USD) | | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash, cash equivalents and marketable securities | $333,375 | $324,204 | | Total assets | $408,385 | $463,091 | | Total liabilities | $73,879 | $124,323 | | Stockholders' equity | $334,506 | $338,768 | Corporate Information This section provides an overview of the company's business and includes cautionary notes on forward-looking statements About Zymeworks Inc. Zymeworks is a clinical-stage biotechnology company developing biotherapeutics for cancer and immunological diseases - Zymeworks is a clinical-stage biotech focused on cancer, inflammation, and autoimmune diseases using its complementary therapeutic platforms[18] - Its lead product, zanidatamab, is the first dual HER2-targeted bispecific antibody approved for HER2-positive biliary tract cancer (BTC) in the U.S., Europe, and China[18] - The company's wholly-owned pipeline includes ZW171 and ZW191 in Phase 1 studies, with ZW251 expected to enter the clinic in 2025[18] Forward-Looking Statements This section provides a legal disclaimer cautioning investors about the risks and uncertainties of forward-looking statements - The press release includes forward-looking statements regarding strategic priorities, clinical development timelines, regulatory approvals, and financial projections like the cash runway[19][21] - Key risks that could cause actual results to differ include product candidate failure in development, not achieving milestones, regulatory delays, and unsuccessful commercialization[21]