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Zymeworks Provides Corporate Update and Reports Q3 2022 Financial Results
Monday, November 21, 2022Company Profile | Follow Company
Vancouver, BC, November 21, 2022--(T-Net)--Zymeworks Inc. (NYSE: ZYME), a clinical-stage biopharmaceutical company developing multifunctional biotherapeutics, today reported financial results for the third quarter ended September 30, 2022.
"We have had a transformative quarter beginning with the presentation of results from our Phase 1 trial of zanidatamab zovodotin, the presentation of our early R&D day and culminating in our announcement of the zanidatamab licensing agreement with Jazz," said Kenneth Galbraith, Chair & CEO of Zymeworks.
"All of these events are important steps in our path forward over the coming years. With a zanidatamab partnership executed, our cash runway expected to be extended, and a growing portfolio of exciting preclinical product candidates, we are well situated to continue advancing the development of novel biotherapeutics and further progress towards our goal of addressing difficult to treat cancers with traditionally poor patient prognoses."
Third Quarter 2022 Business Highlights and Recent Developments
Early Research & Development Program Update
Zymeworks presented an update on its preclinical programs at an Early R&D day in New York City on October 20, 2022. At this event, we highlighted the progress in development of our novel pipeline assets and next-generation technology platforms and outlined the programs supporting our goal of filing five new investigational new drug (IND) applications in the next 5 years.
"It is an exciting time to be a part of a team at the forefront of antibody engineering and design," said Paul Moore, Ph.D., Chief Scientific Officer at Zymeworks. "With the presentation of our new pipeline assets, as well as the vision behind where we see our future growth in multispecific antibody therapeutics and antibody-drug conjugate development, we have an exciting future ahead. We look forward to reporting further progress as we develop and expand our product pipeline in the years ahead to pursue our goal of filing 5 new IND applications in the next 5 years."
Updates on the Company's antibody drug conjugate programs, included:
Review of progress in multispecific antibody therapeutics development, including:
Financial Results for the Quarter Ended September 30, 2022
Zymeworks' revenue relates primarily to non-recurring upfront fees, expansion payments or milestone payments from collaboration and license agreements, which can vary in timing and amount from period to period, as well as payments for research and development support.
Revenue for the three months ended September 30, 2022 was $2.6 million compared to $4.4 million for the same period of 2021. Revenue for 2022 included $2.6 million for research support and other payments from our partners. Revenue for the same period in 2021 included milestone revenue of $4.0 million from Janssen and $0.4 million in research support and other payments from our partners.
Research and development expense decreased by $12.8 million in the three months ended September 30, 2022 compared to the same period in 2021.
Research and development expense in 2022 included non-cash stock-based compensation expense of $2.2 million, comprised of a $2.2 million expense from equity classified awards and a nominal amount of expense related to the non-cash, mark-to-market revaluation of certain historical liability classified awards. Excluding stock-based compensation expense and restructuring recovery of $0.1 million, research and development expense decreased on a Non-GAAP basis by $10.3 million in 2022 compared to 2021.
The decrease related primarily to lower employee compensation expense as a result of a decrease in headcount due to the Company's restructuring program, a decrease in manufacturing and clinical expenses for zanidatamab, as well as a decrease in licensing expenses related to preclinical activities.
"With the anticipated proceeds from our exclusive licensing agreement with Jazz, our significantly improved financial position allows Zymeworks to properly fund and advance exciting opportunities in our product pipeline," said Chris Astle, Ph.D., SVP and Chief Financial Officer. "With our cash runway potentially extended through at least 2026, and potentially beyond, we can focus on strategically advancing our preclinical and early clinical pipeline assets, and will look to maintain our strong balance sheet through proper expense management and continued pursuit of additional partnership and collaboration opportunities and asset monetizations."
We expect research and development expenditures to fluctuate over time in line with the advancement, expansion and completion of the clinical development of our product candidates, as well as our ongoing preclinical research activities.
Excluding the impact of stock-based compensation and restructuring recovery of $0.8 million, general and administrative expense decreased on a Non-GAAP basis by $0.1 million during three months ended September 30, 2022 compared to same period in 2021. This decrease was primarily due to a decrease in salaries and benefits expense as a result of decrease in headcount due to the Company's restructuring program, partially offset by an increase in professional fees, depreciation and other expenses in 2022.
Net loss for the three months ended September 30, 2022 was $47.8 million compared to $60.6 million for the same period of 2021, representing a 21% decrease.
As of September 30, 2022, Zymeworks had $166.2 million in cash resources consisting of cash, cash equivalents and short-term investments. We continue to pursue additional partnerships and collaborations across our product portfolio in order to advance and broaden our early clinical and preclinical candidate pipeline.
About Zymeworks Inc.
Zymeworks is a clinical-stage biopharmaceutical company dedicated to the discovery, development and commercialization of next-generation multifunctional biotherapeutics. Zymeworks' suite of therapeutic platforms and its fully integrated drug development engine enable precise engineering of highly differentiated product candidates. Zymeworks' lead clinical candidate, zanidatamab, is a novel Azymetric HER2-targeted bispecific antibody currently being evaluated in multiple Phase 1, Phase 2, and pivotal clinical trials globally as a targeted treatment option for patients with solid tumors that express HER2.
Zymeworks' second clinical candidate, zanidatamab zovodotin (ZW49), is a novel bispecific HER2-targeted antibody-drug conjugate currently in Phase 1 clinical development and combines the unique design and antibody framework of zanidatamab with Zymeworks' proprietary ZymeLink⢠linker and cytotoxin. Zymeworks is also advancing a deep preclinical pipeline in oncology (including immuno-oncology agents) and other therapeutic areas. In addition, its therapeutic platforms are being leveraged through strategic partnerships with global biopharmaceutical companies.
ZYMEWORKS INC. |
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Condensed Interim Consolidated Statements of Loss and Comprehensive Loss |
|||||||||||||||
(Expressed in thousands of U.S. dollars except share and per share data) (unaudited) |
|||||||||||||||
|
Three Months Ended |
|
Nine Months Ended |
||||||||||||
|
2022 |
|
2021 |
|
2022 |
|
2021 |
||||||||
Revenue |
|
|
|
|
|
|
|
||||||||
Research and development collaborations |
$ |
2,631 |
|
|
$ |
4,395 |
|
|
$ |
9,989 |
|
|
$ |
6,810 |
|
Operating expenses: |
|
|
|
|
|
|
|
||||||||
Research and development |
|
37,097 |
|
|
|
49,893 |
|
|
|
155,629 |
|
|
|
144,887 |
|
General and administrative |
|
15,892 |
|
|
|
15,466 |
|
|
|
43,227 |
|
|
|
36,707 |
|
Total operating expenses |
|
52,989 |
|
|
|
65,359 |
|
|
|
198,856 |
|
|
|
181,594 |
|
Loss from operations |
|
(50,358 |
) |
|
|
(60,964 |
) |
|
|
(188,867 |
) |
|
|
(174,784 |
) |
Other income, net |
|
2,483 |
|
|
|
1,149 |
|
|
|
3,665 |
|
|
|
2,948 |
|
Loss before income taxes |
|
(47,875 |
) |
|
|
(59,815 |
) |
|
|
(185,202 |
) |
|
|
(171,836 |
) |
Income tax recovery (expense) |
|
29 |
|
|
|
(764 |
) |
|
|
112 |
|
|
|
(855 |
) |
Net loss and comprehensive loss |
$ |
(47,846 |
) |
|
$ |
(60,579 |
) |
|
$ |
(185,090 |
) |
|
$ |
(172,691 |
) |
Net loss per common share: |
|
|
|
|
|
|
|
||||||||
Basic |
$ |
(0.72 |
) |
|
$ |
(1.17 |
) |
|
$ |
(2.86 |
) |
|
$ |
(3.35 |
) |
Diluted |
$ |
(0.72 |
) |
|
$ |
(1.25 |
) |
|
$ |
(2.86 |
) |
|
$ |
(3.66 |
) |
Weighted-average common shares outstanding: |
|
|
|
|
|
|
|
||||||||
Basic |
|
66,477,016 |
|
|
|
51,657,371 |
|
|
|
64,751,271 |
|
|
|
51,483,428 |
|
Diluted |
|
66,478,157 |
|
|
|
52,238,901 |
|
|
|
64,756,063 |
|
|
|
52,125,929 |
|
ZYMEWORKS INC. |
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Selected Condensed Consolidated Balance Sheet Data |
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(Expressed in thousands of U.S. dollars) |
|||||||
|
September 30, |
|
December 31, |
||||
|
(unaudited) |
|
|
||||
Cash, cash equivalents and short-term investments |
$ |
166,242 |
|
|
$ |
252,608 |
|
Working capital |
|
132,950 |
|
|
|
216,367 |
|
Total assets |
|
300,263 |
|
|
|
389,132 |
|
Accumulated deficit |
|
(868,194 |
) |
|
|
(683,104 |
) |
Total shareholders' equity |
|
179,758 |
|
|
|
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 share and per share data) |
|||||||||||||||
(unaudited) |
|||||||||||||||
|
Three Months Ended |
|
Nine Months Ended |
||||||||||||
|
2022 |
|
2021 |
|
2022 |
|
2021 |
||||||||
|
|
|
|
|
|
|
|
||||||||
Research and development expenses |
$ |
37,097 |
|
|
$ |
49,893 |
|
|
$ |
155,629 |
|
|
$ |
144,887 |
|
Stock-based compensation (expense) / recovery for equity classified instruments (*) |
|
(2,226 |
) |
|
|
(5,562 |
) |
|
|
(1,450 |
) |
|
|
(15,688 |
) |
Stock-based compensation (expense) / recovery for liability classified instruments (*) |
|
(2 |
) |
|
|
916 |
|
|
|
772 |
|
|
|
3,185 |
|
Restructuring (expense) / recovery |
|
108 |
|
|
|
â |
|
|
|
(6,141 |
) |
|
|
â |
|
Adjusted research and development expenses (Non-GAAP basis) |
$ |
34,977 |
|
|
$ |
45,247 |
|
|
$ |
148,810 |
|
|
$ |
132,384 |
|
|
|
|
|
|
|
|
|
||||||||
General and administrative expenses |
$ |
15,892 |
|
|
$ |
15,466 |
|
|
$ |
43,227 |
|
|
$ |
36,707 |
|
Stock-based compensation (expense) / recovery for equity classified instruments (*) |
|
(2,473 |
) |
|
|
(4,773 |
) |
|
|
(1,522 |
) |
|
|
(14,260 |
) |
Stock-based compensation (expense) / recovery for liability classified instruments (*) |
|
(29 |
) |
|
|
3,600 |
|
|
|
3,010 |
|
|
|
15,006 |
|
Restructuring (expense) / recovery |
|
832 |
|
|
|
â |
|
|
|
(2,789 |
) |
|
|
â |
|
Adjusted general and administrative expenses (Non-GAAP basis) |
$ |
14,222 |
|
|
$ |
14,293 |
|
|
$ |
41,926 |
|
|
$ |
37,453 |
|
|
Three Months Ended |
|
Nine Months Ended |
||||||||||||
|
2022 |
|
2021 |
|
2022 |
|
2021 |
||||||||
|
|
|
|
|
|
|
|
||||||||
Net loss per common share - Basic |
$ |
(0.72 |
) |
|
$ |
(1.17 |
) |
|
$ |
(2.86 |
) |
|
$ |
(3.35 |
) |
Stock-based compensation expense (recovery) per common share |
|
0.07 |
|
|
|
0.11 |
|
|
|
(0.01 |
) |
|
|
0.23 |
|
Restructuring expenses per common share |
|
(0.01 |
) |
|
|
â |
|
|
|
0.14 |
|
|
|
â |
|
Adjusted net loss per common share - Basic (Non-GAAP basis) |
$ |
(0.66 |
) |
|
$ |
(1.06 |
) |
|
$ |
(2.73 |
) |
|
$ |
(3.12 |
) |
|
|
|
|
|
|
|
|
||||||||
Net loss per common share - Diluted |
$ |
(0.72 |
) |
|
$ |
(1.25 |
) |
|
$ |
(2.86 |
) |
|
$ |
(3.66 |
) |
Stock-based compensation expense (recovery) per common share |
|
0.07 |
|
|
|
0.11 |
|
|
|
(0.01 |
) |
|
|
0.22 |
|
Restructuring expenses per common share |
|
(0.01 |
) |
|
|
â |
|
|
|
0.14 |
|
|
|
â |
|
Adjusted net loss per common share - Diluted (Non-GAAP basis) |
$ |
(0.66 |
) |
|
$ |
(1.14 |
) |
|
$ |
(2.73 |
) |
|
$ |
(3.44 |
) |
(*): 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 nine months ended September 30, 2022 (nil for the three months ended September 30, 2022).
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. [ MORE ] |
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