Zymeworks(ZYME) - 2022 Q1 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Zymeworks reported revenue of $1.9 million for Q1 2022, up from $0.6 million in Q1 2021, primarily from research support and partner payments [13] - Research and development expenses increased to $62.5 million in Q1 2022 from $44.3 million in Q1 2021, driven by higher clinical trial expenses for zanidatamab and restructuring costs [13][14] - General and administrative expenses rose to $12.1 million in Q1 2022 from $1.3 million in Q1 2021, including a non-cash stock-based compensation recovery of $5.1 million [15][16] - The net loss for Q1 2022 was $72.7 million, compared to $44.6 million in Q1 2021, attributed to increased operating expenses [17] - Cash resources were $300.5 million as of March 31, 2022, expected to fund operations into the second half of 2023 and beyond [19] Business Line Data and Key Metrics Changes - The increase in research and development expenses was primarily due to the initiation of the HERIZON-GEA-01 study and related drug manufacturing expenses [14] - The restructuring program led to severance and other expenses, impacting general and administrative costs [15][16] Market Data and Key Metrics Changes - The HERIZON-BTC-01 study completed enrollment ahead of schedule, with expectations to lock the study database by the end of 2022 and share results by early 2023 [22][24] - The FDA granted zanidatamab breakthrough therapy designation for patients with previously treated HER2-gene amplified biliary tract cancer, allowing for accelerated approval processes [24] Company Strategy and Development Direction - The company aims to build shareholder value by enabling patients to return home disease-free, focusing on developing therapies for hard-to-treat cancers [10] - Zymeworks is actively pursuing new partnerships and collaborations to extend its cash runway beyond 2023 [19][39] - The corporate goal includes advancing two new product candidates utilizing proprietary platform technologies and submitting two IND applications by the end of 2024 [37][40] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence that increased operating expenses in Q1 2022 are expected to trend lower in upcoming quarters due to the completion of enrollment in clinical studies [18] - The company is focused on improving its balance sheet and has successfully closed a public offering despite challenging macroeconomic conditions [38] - Management emphasized the importance of integrating partnerships and collaborations throughout the product portfolio to enhance long-term value [51][76] Other Important Information - The company is in the process of selecting a new Chief Scientific Officer and has made significant progress in restructuring efforts [20][21] - Zymeworks is advancing its second clinical candidate, ZW49, and has completed enrollment in its expansion cohorts [32][33] Q&A Session Summary Question: Update on ASCO expectations and patient numbers - Management indicated that the patient numbers for ASCO presentations will be similar to previous Phase 2 data presentations, with interim data cuts expected [47] Question: Preference for early-stage platform deals versus specific asset transactions - Management is focused on integrating partnerships throughout the product portfolio to enhance development timing and broaden program scope [51] Question: Interpretation of ASCO's decision regarding CDK-46 combo presentation - Management noted that the decision was based on the maturity of the data, with plans to present a more mature version later [55] Question: Strategic updates on ZW49 and tumor types - Management is working on determining the next clinical study for ZW49 and will provide updates as soon as they have certainty [56] Question: Benchmarks for HERIZON-BTC in second-line disease - Management highlighted that there is significant unmet need in biliary tract cancer, and they expect better response rates than current chemotherapy options [63] Question: Proportion of patients enrolled in China and Korea for BTC - Management confirmed global enrollment for the study, with a focus on cooperation with BeiGene for regulatory discussions [80] Question: Data expectations from other zanidatamab indications - Management is enrolling in a Phase 2 study for front-line colorectal cancer but has not provided specific timelines for data presentation [90]