On March 14, 2018 Zymeworks Inc. (NYSE/TSX: ZYME), a clinical-stage biopharmaceutical company developing multifunctional therapeutics, reported financial results for the year ended December 31, 2017 (Press release, Zymeworks, MAR 14, 2018, View Source [SID1234524777]).
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"2017 was marked by a number of key corporate successes," said Ali Tehrani, Ph.D., Zymeworks’ President & CEO. "We continued to generate promising clinical results for ZW25, added a sixth global pharmaceutical partner, and saw important progress in our partners’ programs as they advanced compounds utilizing our technology towards the clinic."
2017 Business Highlights and Recent Developments
Expanded Clinical Dataset for ZW25
The Company reported results from the dose-escalation portion of its ongoing Phase 1 clinical trial, showing encouraging tolerability and anti-tumor activity in heavily pretreated patients with HER2-expressing cancers, including breast and gastric cancers. Zymeworks has increased the number of clinical trial sites in the United States and is in the process of activating multiple sites across Canada.
Established New Corporate Partnership
Zymeworks provided a license to Janssen to develop up to six bispecific antibodies in a transaction potentially worth US$1.45 billion including a US$50 million upfront payment, milestones, and tiered royalties on product sales.
Partners’ Programs Progress Towards the Clinic
Two long-term partners (Lilly and Merck) have selected lead Azymetric bispecific candidates for advancement towards the clinic, and Daiichi Sankyo’s program achieved a significant research milestone resulting in a payment to Zymeworks.
Dr. Tehrani noted, "Looking ahead, we plan to build on the momentum established last year as we create additional value throughout our business. We anticipate achieving the following milestones: complete enrollment in our Phase 1 study and report additional data for ZW25; file an Investigational New Drug (IND) Application for our second clinical compound, ZW49; present preclinical data on our other product candidates; and expand our partnering activities."
Financial Results for the Year Ended December 31, 2017
Revenue in 2017 was $51.8 million as compared to $11.0 million in 2016. The increase of $40.8 million was primarily due to the recognition of a $50.0 million upfront fee received from Janssen and a $1.0 million milestone payment from Daiichi Sankyo.
For the year ended December 31, 2017, research and development expenditures were $41.7 million as compared to $36.8 million in the prior year. The increase was primarily due to clinical costs for ZW25 and development costs for ZW49. General and administrative expenses were $18.6 million in 2017 and $12.6 million in 2016. The change between the periods was primarily due to an increase in compensation costs, professional fees, and other administrative expenses.
The net loss for the year ended December 31, 2017, decreased to $10.4 million as compared to $33.8 million in 2016, primarily due to increased revenue offsetting research and development expenses as previously noted. Zymeworks expects research and development expenditures to increase over time due to the ongoing development of product candidates and other clinical, preclinical, and regulatory activities.
As of December 31, 2017, Zymeworks had $87.8 million in cash and cash equivalents and short-term investments. Zymeworks expects to continue receiving revenue from its existing and future corporate collaborations, including technology access fees, research and development fees for services rendered and milestone-based payments. However, its ability to receive these payments is dependent upon either Zymeworks or its collaborators successfully completing specified research and development activities.