On November 6, 2018 Protagonist Therapeutics, Inc. (Nasdaq:PTGX) reported its financial results for the third quarter ended September 30, 2018, and provided a corporate update on its clinical development programs (Press release, Protagonist, NOV 6, 2018, View Source [SID1234530829]).

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"We are pleased to report continued progress from each of the three clinical programs evaluating differentiated and novel therapeutics enabled by our proprietary peptide engineering platform," commented Dinesh V. Patel, Ph.D., Protagonist President and Chief Executive Officer. "We recently presented safety and efficacy data from the Phase 2 PROPEL study. Notably, these data show dose-dependent histologic remission in ulcerative colitis patients. The cumulative data for PTG-100, which now includes clinical, endoscopic, histologic and biomarker data, is supportive of the GI-restricted, oral targeted therapy approach for potential treatment of inflammatory bowel diseases."

"In addition, we recently announced successful completion of the Phase 1 clinical trial of the oral interleukin-23 receptor antagonist PTG-200. We are working closely with our partner Janssen Biotech to support the U.S. IND filing for a Phase 2 Crohn’s trial in the coming months."

"Our hepcidin mimetic PTG-300 is on track for initiation of an open label, global, phase 2 trial in beta-thalassemia patients by year end. We are encouraged to note that PTG-300 now has Orphan Drug Designation both from the U.S. FDA and European Medicines agency, as well as Fast Track designation from the U.S. FDA for beta-thalassemia."

Product Development Update:

PTG-100

· Clinical data from the PROPEL Study presented at the recent United European Gastroenterology Week demonstrated that treatment with PTG-100, an oral, gut-restricted alpha-4-beta-7 integrin antagonist peptide, was well tolerated and associated with higher rates of clinical remission relative to placebo.

· The dose-dependent increase in rates of histologic remission, the blood biomarker data and topline safety data presented at the meeting expand upon the clinical remission and endoscopic response results announced previously in August 2018 that involved an independent, blinded re-read of endoscopies and had demonstrated signals of clinical efficacy.

· The totality of the data from the Phase 2 PROPEL study in UC patients provides first evidence of safety and clinical efficacy with an oral alpha-4-beta-7-integrin specific antagonist agent and supports further development of PTG-100.

PTG-200

· The Phase 1 study of PTG-200, an oral peptide IL-23 receptor antagonist partnered with Janssen Biotech, was successfully completed. Top-line results from this randomized, double-blind, placebo-controlled, single- and multiple-dose escalation study in 80 normal healthy volunteers demonstrated that PTG-200 treatment was well tolerated, with no serious adverse events or dose-limiting toxicities observed. Pharmacokinetic and pharmacodynamic parameters were consistent with the gastrointestinal-restricted design of PTG-200.

· Results from this study provide the first clinical data in support of PTG-200 and creates a path forward for its evaluation as a potential first-in-class oral IL-23 pathway based therapeutic for treatment of IBD.

·Protagonist and Janssen Biotech are working towards filing a U.S. IND in the coming months to support a Phase 2 clinical study in Crohn’s disease patients.

PTG-300

·The Company remains on track to initiate a global Phase 2 clinical trial in beta-thalassemia patients in the fourth quarter of 2018.

· The U.S. FDA granted Fast Track Designation to PTG-300 for the treatment of chronic anemia due to ineffective erythropoiesis in patients with beta-thalassemia. This designation will facilitate the future development and expedite the review process of PTG-300.

· The European Medicines Agency granted Orphan Drug Designation to PTG-300 in the treatment of beta-thalassemia. Orphan drug designation from the US FDA had been previously granted for PTG-300 for potential treatment of beta-thalassemia. An orphan designation provides regulatory and financial incentives for development as well as certain benefits upon regulatory approval, if received.

Corporate Update — Financing:

· Protagonist announced the completion of a financing with investors including BVF Partners L.P. and their affiliates for gross proceeds of $22 million in August 2018. This enables the company to fund the development of its multiple clinical assets in diverse disease indications addressing unmet medical needs.

Financial Results

Protagonist reported a net loss of $8.7 million and $25.1 million, respectively, for the third quarter and first nine months of 2018, as compared to a net loss of $4.8 million and $33.9 million, respectively, for the same periods of 2017. The increase in net loss for the third quarter of 2018 as compared to the prior year period was driven primarily by a decrease in revenue under the Janssen Collaboration Agreement related to proportional performance as measured by actual costs incurred as a percentage of budgeted costs, and increases in research and development (R&D) and general and administrative (G&A) expenses. The decrease in net loss for the first nine months of 2018 as compared to the prior year period was driven primarily by an increase in revenue under the Janssen Collaboration Agreement, which became effective in the third quarter of 2017, partially offset by increases in R&D and G&A expenses. The net loss for the third quarter and first nine months of 2018 includes non-cash stock-based compensation of $2.0 million and $4.8 million, respectively, as compared to $1.2 million and $3.1 million, respectively, for the same periods of 2017.

R&D expenses for the third quarter and first nine months of 2018 were $12.1 million and $45.2 million, respectively, as compared to $11.2 million and $34.5 million, respectively, for the same periods of 2017. The increases in R&D expenses were primarily due to costs related to contract manufacturing and the preparation for and conduct of clinical trials for our product candidates. R&D expenses for the third quarter and first nine months of 2018 included increases in salaries and employee-related expenses due to an increase in R&D personnel.

G&A expenses for the third quarter and first nine months of 2018 were $3.4 million and $10.2 million, respectively, as compared to $2.6 million and $8.7 million, respectively, for the same periods of 2017. The increases in G&A expenses were primarily due to increases in salaries and employee-related expenses to support the growth of our operations.

Protagonist ended the third quarter with $138.5 million in cash, cash equivalents and investments. The company expects to have sufficient financial resources to fund operations to mid-2020.

On November 6, 2018 Ionis Pharmaceuticals, Inc. (Nasdaq: IONS) today reported financial results for the third quarter of 2018 and highlighted its recent business and pipeline successes.

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"We enter the fourth quarter in a position of financial strength, driven by strong worldwide SPINRAZA sales. In addition, we achieved numerous successes during the quarter that advanced our pipeline, technology and business and contributed to our financial strength. In 2019 and beyond, we are positioned for continued growth bolstered by the addition of TEGSEDI commercial revenue," said Stanley T. Crooke, M.D., Ph.D., chairman of the board and chief executive officer of Ionis. "Beyond our commercial-stage drugs, we have a broad and growing pipeline of innovative programs we are advancing toward the market. We continue to advance our antisense technology, expanding its application to more diseases, both rare and common. An example of this is our LICA technology, which was further validated by the results from the Phase 2 study of AKCEA-APO(a)-LRx – our largest and longest study to date with a LICA drug – which demonstrated significant reductions in Lp(a) and an attractive safety profile. We also continue to expand our Ionis-owned pipeline and our existing relationships with partners. The successes we are achieving with our commercial-stage drugs and in advancing our pipeline have increased our financial strength and our ability to deliver innovative new drugs to patients in need."

Third Quarter 2018 Financial Highlights

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Revenues increased year-to-date by more than 15 percent compared to 2017

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Total revenue was $145 million and $408 million for the third quarter and year-to-date 2018, respectively, compared to $118 million and $346 million for the same periods in 2017

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Commercial revenue from SPINRAZA for year-to-date 2018 was $168 million, a nearly three-fold increase over year-to-date 2017

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Commercial revenue was 45 percent of Ionis’ total revenue in the first nine months of 2018 compared to less than 20 percent for the same period in 2017, reflecting Ionis’ transition to a commercial-stage company

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On track for third consecutive year of pro forma operating profitability while investing in the launches of two drugs

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GAAP operating results were a loss of $19 million and $72 million for the third quarter and year-to-date 2018, respectively, compared to operating income of $11 million and $37 million for the same periods in 2017

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Pro forma operating income was $16 million and $25 million for the third quarter and year-to-date 2018, respectively, compared to $33 million and $101 million for the same periods in 2017

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Operating expenses increased primarily due to higher SG&A expenses related to preparing to launch TEGSEDI and WAYLIVRA

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Substantial cash position of $2 billion enabling investment in commercial products and pipeline

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The increase in Ionis’ cash position was primarily due to the $1 billion Ionis received from Biogen for the 2018 strategic neurology collaboration

"Our strong third quarter financial results put us on track for our third consecutive year of pro forma operating income. In the fourth quarter, we are excited to add TEGSEDI commercial sales to our growing SPINRAZA revenue and substantial base of R&D revenue, positioning us for significant revenue growth going forward," said Elizabeth L. Hougen, chief financial officer of Ionis. "Importantly, we are in a strong financial position with sustainable profitability and $2 billion in cash even as we support the launch of TEGSEDI in multiple markets and prepare for the launch of WAYLIVRA. Further, our financial strength coupled with our business strategy provides us with the flexibility to maximize the value of our robust antisense technology platform and innovative pipeline of drugs."

All pro forma amounts referred to in this press release exclude non-cash compensation expense related to equity awards. Please refer to the reconciliation of pro forma and GAAP measures, which is provided later in this release. Additionally, Ionis has labeled its prior period financial statements "as revised" to reflect the new revenue recognition accounting standard the Company adopted on January 1, 2018.

Business Highlights

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SPINRAZA – the first and only approved treatment for people with spinal muscular atrophy

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SPINRAZA sales continued to grow in the third quarter, both in the U.S. and ex-U.S., with global sales of more than $1 billion for year-to-date 2018, as reported by Biogen.

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Nearly 6,000 SMA patients were on SPINRAZA as of the third quarter.

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In the U.S., the number of adult patients on therapy grew by over 20 percent compared to the second quarter. Adult SMA patients, which represent the largest and most undertreated patient segment, accounted for more than 50 percent of start forms in the third quarter.

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Access outside the U.S. expanded with formal reimbursement in 28 markets and continued revenue growth in the EU, Asia Pacific and Latin America.

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TEGSEDI (inotersen) – launched in multiple markets for the treatment of polyneuropathy of hereditary transthyretin amyloidosis (hATTR) in adult patients

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TEGSEDI approved in the U.S., EU and Canada

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Commercial patients in Germany on TEGSEDI

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TEGSEDI prescriptions received in the U.S.

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WAYLIVRA (volanesorsen) – under regulatory review for the treatment of people living with FCS

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Preparing for launch in the EU following approval

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Planning to confirm a path forward in the U.S. and Canada

Pipeline and Business Progress

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Ionis and Akcea reported positive top-line data from a Phase 2 study of AKCEA-APO(a)-LRx in people with high levels of Lp(a) and established cardiovascular disease demonstrating robust target reductions and a favorable safety and tolerability profile
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Ionis and Roche entered a new collaboration to develop IONIS-FB-LRx for the treatment of people with complement-mediated diseases. Ionis received a $75 million upfront payment and will be eligible for development, regulatory and sales milestone payments and license fees of up to $684 million plus royalties of up to 20 percent on commercial sales
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Positive Phase 1b/2 data for danvatirsen (IONIS-STAT3-2.5Rx) in combination with durvalumab were presented at the European Society for Medical Oncology (ESMO) (Free ESMO Whitepaper) 2018 Congress, demonstrating a response rate approximately double that of durvalumab alone, based on previous studies in patients with refractory head and neck cancer. Ionis earned a $17.5 million milestone payment because AstraZeneca is advancing the program
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Ionis completed enrollment in a Phase 2b study of IONIS-FXIRx in patients with end-stage renal disease on dialysis, with data planned for mid-2019
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Ionis or its partners initiated clinical studies with IONIS-GHR-LRx (Phase 2), IONIS-C9Rx (Phase 1/2), IONIS-FXI-LRx and IONIS-AZ4-2.5-LRx (Phase 1)
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Ionis earned a $10 million milestone payment from AstraZeneca for advancing an undisclosed oncology program into development
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Ionis appointed Dr. Michael Hayden and Mr. Peter N. Reikes to its Board of Directors

Key Upcoming Events

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Potential approval and launch of WAYLIVRA in the EU

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Pivotal program initiation for IONIS-HTTRx in patients with Huntington’s disease

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Results from up to three Phase 2 studies and four Phase 1 studies

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Initiations of up to three Phase 2 studies and two Phase 1 studies
The increase in revenue in the first nine months of 2018 compared to the same period in 2017 was primarily due to increasing commercial revenue from SPINRAZA royalties, which increased over 175 percent. Our R&D revenue for the first nine months of 2018 was significant and demonstrates our ability to generate sustainable revenue from our numerous partnerships.

R&D revenue from the amortization of upfront payments increased by $22 million in the first nine months of 2018, compared to the same period in 2017 primarily due to Ionis’ 2018 strategic neurology collaboration with Biogen, which started in the second quarter of 2018. In the fourth quarter of 2018, Ionis will add amortization revenue from its new collaboration with Roche to develop IONIS-FB-LRx.

Ionis’ 2018 R&D revenue from milestone payments was bolstered by two $10 million milestone payments in the third quarter, one from Biogen and one from AstraZeneca, as Ionis’ partnered programs advanced. In the same period of 2017, R&D revenue from milestone payments included $90 million of milestone payments from Biogen for SPINRAZA approval in the EU and Japan. Already in the fourth quarter, Ionis has earned nearly $30 million in milestone payments from AstraZeneca.

Operating Expenses

Operating expenses for the three and nine months ended September 30, 2018 on a GAAP basis were $164 million and $480 million, respectively, and on a pro forma basis were $129 million and $383 million, respectively. These amounts compare to GAAP operating expenses for the three and nine months ended September 30, 2017 of $107 million and $309 million, respectively, and pro forma operating expenses of $86 million and $246 million, respectively. The increases in operating expenses were principally due to higher SG&A expenses as Akcea, Ionis’ affiliate, prepared to commercialize TEGSEDI and WAYLIVRA. The Company’s SG&A expenses also increased due to an increase in fees the Company owed under its in-licensing agreements related to SPINRAZA, as a result of increased SPINRAZA product sales.

Net Income (Loss) Attributable to Ionis Common Stockholders

Ionis reported a net loss attributable to Ionis’ common stockholders of $5 million and $46 million for the three and nine months ended September 30, 2018, respectively, compared to a net loss of $3 million and net income of $3 million for the same periods in 2017, all on a GAAP basis. On a pro forma basis, Ionis reported net income attributable to Ionis’ common stockholders of $30 million and $51 million for the three and nine months ended September 30, 2018, respectively, compared $19 million and $67 million for the same periods in 2017.

At September 30, 2018, Ionis owned approximately 75 percent of Akcea. The shares of Akcea third parties own represent an interest in Akcea’s equity that Ionis does not control. However, because Ionis continues to maintain overall control of Akcea through its voting interest, Ionis reflects the assets, liabilities and results of operations of Akcea in Ionis’ consolidated financial statements. Ionis reflects the noncontrolling interest attributable to other owners of Akcea’s common stock in a separate line called "Net loss attributable to noncontrolling interest in Akcea" on Ionis’ statement of operations. Ionis’ net loss attributable to noncontrolling interest in Akcea for the three and nine months ended September 30, 2018, was $16 million and $41 million, respectively. Ionis’ net loss attributable to noncontrolling interest in Akcea for the three and nine months ended September 30, 2017, was $5 million.

For the three months ended September 30, 2018 and 2017, basic and diluted net loss per share were $0.03 and $0.02, respectively. For the nine months ended September 30, 2018, basic and diluted net loss per share were each $0.33. For the nine months ended September 30, 2017, basic and diluted net income per share were each $0.13. All amounts are on a GAAP basis.

Balance Sheet

As of September 30, 2018, Ionis had cash, cash equivalents and short-term investments of $2 billion compared to $1 billion at December 31, 2017. The increase in Ionis’ cash, cash equivalents and short-term investments was primarily due to the $1 billion Ionis received from Biogen for the 2018 strategic neurology collaboration.

Webcast and Conference Call

Today, at 11:30 a.m. Eastern Time, Ionis will conduct a live webcast conference call to discuss this earnings release and related activities. Interested parties may listen to the call by dialing 877-443-5662 or access the webcast at www.ionispharma.com. A webcast replay will be available for a limited time.

On November 6, 2018 Johnson & Johnson (NYSE: JNJ) reported that it will participate in the Credit Suisse 27th Annual Healthcare Conference on Tuesday, November 13th, at The Phoenician in Scottsdale, AZ. Scott White, Company Group Chairman, North America Pharmaceuticals will represent the Company in a session scheduled at 8:35 a.m. (MST) (Press release, Johnson & Johnson, NOV 6, 2018, View Source [SID1234530870]).

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This webcast will be available to investors and other interested parties by accessing the Johnson & Johnson website at www.investor.jnj.com.

A webcast replay will be available approximately two hours after the live webcast.

On November 6, 2018 Vedanta Biosciences, a clinical-stage company developing a new category of therapies for immune-mediated diseases based on rationally-defined consortia of human microbiome-derived bacteria, reported preclinical data for VE800, the Company’s orally-administered, live biotherapeutic product candidate in immuno-oncology (Press release, Vedanta Biosciences, NOV 6, 2018, View Source [SID1234530930]). The study showed that VE800 elicited an anti-tumor immune response as a monotherapy and also enhanced effects of immune checkpoint inhibitors. Additionally, the results describe a mechanism of action for VE800 as the robust interferon-gamma producing CD8+ (cytotoxic) T cell response was elicited via activation of dendritic cells. The data will be presented at the Society for Immunotherapy of Cancer (SITC) (Free SITC Whitepaper)’s (SITC) (Free SITC Whitepaper) 33rd Annual Meeting by Dr. Bruce Roberts, Chief Scientific Officer of Vedanta Biosciences, on November 8. Vedanta Biosciences expects to initiate a clinical study of VE800 in mid-2019.

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"Our work shows that VE800 induces robust tumor infiltration by cytotoxic T cells – one of the strongest predictors of response to checkpoint inhibitors – and promotes suppression of tumor growth and enhanced survival in a range of cancer models," said Bruce Roberts, Ph.D., Chief Scientific Officer of Vedanta Biosciences. "To our knowledge, VE800 is the most advanced immuno-oncology product candidate based on a defined consortium of human microbiome-derived bacteria, a therapeutic modality that Vedanta is pioneering. With our cGMP manufacturing processes in place, we’re well-positioned to take VE800 into the clinic in the coming months."

In the preclinical study, VE800 was assessed alone and in combination with various checkpoint inhibitors in colon carcinoma and melanoma tumor models. VE800 was assessed for its ability to induce CD8+ T cells, an important marker of anti-tumor response, as well for its ability to influence accumulation of tumor infiltrating lymphocytes. The study was conducted in collaboration with Dr. Kenya Honda of Keio University, a leader in the microbiome field and a scientific co-founder of Vedanta Biosciences.

Data highlights include:

1. VE800 robustly promoted induction of interferon-gamma producing CD8+ T cells via activation of intestinal dendritic cells and stimulation of interferon-gamma producing CD8+ T cells in a manner dependent on the transcription factor BATF3
2. VE800 enhanced the anti-tumor activity of both anti-PD-1 and anti-CTLA4 antibodies by increasing the level of tumor infiltrating CD8+ T cells
3. VE800 also promoted systemic immune cell activation as evidenced by accumulation of CD8+ T cells in the spleen.

Unlike fecal transplants or single strain approaches to microbiome modulation, Vedanta Biosciences uses pure, clonal cell banks to produce defined collections, or consortia, of bacterial strains designed to effect durable therapeutic changes in a patient’s microbiota. This bypasses the need to rely on direct sourcing of fecal donor material of inconsistent composition.

About VE800
VE800 is Vedanta Biosciences’ oral immuno-oncology product candidate. It consists of a rationally-defined bacterial consortium that activates cytotoxic CD8+ T cells, a type of white blood cell that is the predominant effector in cancer immunotherapy. In preclinical studies, VE800 has been shown to enhance the ability of these T cells to infiltrate tumors, thereby promoting suppression of tumor growth and improving survival. Data also suggest that VE800 may enhance the effects of checkpoint inhibitors. Vedanta Biosciences is evaluating VE800 alone and in combination with checkpoint inhibitors as a potential treatment for patients with advanced or metastatic cancers.

On November 6, 2018 Zymeworks Inc. (NYSE/TSX: ZYME), a clinical-stage biopharmaceutical company developing multifunctional therapeutics, reported financial results for the third quarter ended September 30, 2018 (Press release, Zymeworks, NOV 6, 2018, View Source [SID1234530768]).

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"We continue to expand our business with our seventh pharmaceutical partner, LEO Pharma, recently entering into a strategic collaboration with Zymeworks," said Ali Tehrani, Ph.D., Zymeworks’ President & CEO. "Importantly, this deal represents the evolving structure of our partnerships to include collaborations that provide potential assets for pipeline expansion in new disease areas, as well as significant royalty participation."

Dr. Tehrani continued, "In addition, results from the Phase 1 study for ZW25 will be presented in a plenary session at an upcoming European oncology conference later this month, highlighting new and updated data in gastric and other HER2-expressing cancers, which support our fast-to-market single agent registrational strategy. We are also on track to file an IND for ZW49, our second product candidate, by year end and plan to initiate a Phase 1 study in early 2019."

Recent Business Highlights

Zymeworks and LEO entered into a licensing and research collaboration to generate bispecific antibodies targeting cytokine-receptor pathways with Zymeworks’ Azymetric, EFECT, and antibody generation platforms. The deal expands Zymeworks’ therapeutic reach into new disease areas beyond oncology with potential applications in dermatology, inflammation, and autoimmunity and includes up to US$480 million in upfront and potential milestone payments, in addition to royalties. LEO obtains rights to two bispecifics for dermatology and Zymeworks maintains rights in all other therapeutic areas.

New ZW25 data will be presented at the 30th EORTC-NCI-AACR (Free EORTC-NCI-AACR Whitepaper) symposium in a plenary session by Dr. Murali Beeram, START, San Antonio, TX, on November 14, 2018. Ongoing clinical activity and durability in gastric and tumor-agnostic cohorts will be highlighted, including new patients and data from patients continuing on study since the last data update.

Anthony (Tony) Polverino, Ph.D., joined Zymeworks as Executive Vice President of Early Development and Chief Scientific Officer. With an extensive background in drug discovery and development, including cancer biology and immunotherapy, Dr. Polverino, a former Kite Pharma and Amgen executive, will play a key role in driving Zymeworks’ R&D strategy and the advancement of product candidates from discovery research through translational research/early development.

Zymeworks hosted an R&D Briefing featuring the clinical development strategy of the Company’s lead clinical candidate, ZW25, as well as differentiating IND-enabling studies for its second product candidate, ZW49. Zymeworks also showcased the depth of its ADC platform and selected immuno-oncology programs from its maturing multispecific pipeline.

An IND-submission milestone was achieved in the Lilly collaboration. Eli Lilly is Zymeworks’ first pharmaceutical partner to submit an IND application to the U.S. Food

and Drug Administration (FDA) for a bispecific antibody enabled by Zymeworks’ Azymetric platform.

Financial Results for the Three Months Ended September 30, 2018

Revenue for the three months ended September 30, 2018 was $2.1 million as compared to $0.1 million in the same period in 2017. The change between the two periods was primarily due to a $2.0 million development milestone upon Lilly’s submission of an IND.

For the three months ended September 30, 2018, research and development expenditures were $14.1 million as compared to $11.5 million for the same period in the prior year. The change between the two periods was primarily due to an increase in clinical and drug manufacturing costs for ZW25, as well as an increase in other research and development activities.

General and administrative expenses were $7.5 million for the three months ended September 30, 2018, and $5.3 million for the same period in 2017, primarily due to an increase in non-cash liability classified equity adjustments and stock-based compensation, as well as other increases in compensation and professional fees associated with year-on-year growth following the Company’s initial public offering in 2017.

Non-cash charges for the three months ended September 30, 2018 included $1.8 million ($1.3 million in G&A and $0.5 million in R&D) related to the quarterly mark-to-market revaluation of liability classified equity adjustments (attributed to the accounting treatment of historical stock-based compensation in both Canadian and US dollars) and stock-based compensation.

The net loss for the three months ended September 30, 2018 was $18.8 million as compared to $16.2 million for the same period in 2017. Zymeworks expects R&D expenditures to increase over time due to the ongoing development of product candidates and other clinical, preclinical, and regulatory activities. Additionally, Zymeworks expects to continue receiving 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 September 30, 2018, Zymeworks had $150.0 million in cash and cash equivalents and short-term investments.