On November 3, 2021 Zymeworks Inc. (NYSE: ZYME), a clinical-stage biopharmaceutical company developing multifunctional biotherapeutics, reported financial results for the third quarter ended September 30, 2021 (Press release, Zymeworks, NOV 3, 2021, View Source [SID1234594242]).
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"This year, we delivered upon our goal of presenting data showcasing the potential of zanidatamab to be the new foundational HER2-targeted therapy in first-line gastroesophageal adenocarcinoma (GEA)," said Ali Tehrani, Ph.D., Zymeworks’ President & CEO. "These data support the launch of our second pivotal study, HERIZON-GEA-01, and we look forward to continuing our recent clinical success with upcoming catalysts for zanidatamab in early- and late-line metastatic breast cancer as well as in combination with Ibrance, Tukysa, tislelizumab, and agents targeting the CD47 pathway."
Third Quarter 2021 Business Highlights and Recent Developments
Clinical Data Supports Zanidatamab as Potential New Standard of Care in 1L HER2+ GEA
In September, we presented Phase 2 clinical data for zanidatamab in combination with chemotherapy in first-line metastatic HER2-positive GEA at the European Society for Medical Oncology Annual Congress. The data support zanidatamab as a potential new standard of care in 1L HER2-positive GEA and the initiation of a global, randomized Phase 3 trial scheduled to launch in the fourth quarter of 2021. Further information relating to the pivotal trial design and commercial strategy in gastrointestinal cancers will be provided on a webcast on Tuesday, November 9, 2021 at 4:15 p.m. ET (1:15 p.m. PT). Interested parties can access a live webcast via Zymeworks’ website.
Zanidatamab Plus Chemotherapy in Late-Line Breast Cancer to be Presented at San Antonio Breast Cancer Symposium
The presentation will feature new clinical data for zanidatamab, in combination with chemotherapy, as a late-line treatment for patients with HER2-positive breast cancer. The presentation will be available on Wednesday, December 8, 2021.
First Patient Dosed in Clinical Trial of Zanidatamab and Anti-CD47 Evorpacept (ALX148)
The Phase 1b/2 clinical trial is designed to evaluate the safety and efficacy of zanidatamab in combination with ALX148 (anti-CD47) in patients with advanced HER2-positive breast cancer, HER2-low breast cancer, and additional non-breast HER2-expressing solid tumors.
Study Commences in Investigator-Initiated Trial of Zanidatamab as Neoadjuvant Treatment in HER2-Positive Breast Cancer
A Phase 2 open-label trial to evaluate zanidatamab monotherapy as neoadjuvant treatment in patients with newly diagnosed HER2-positive early breast cancer is being co-lead by Dr. Vincent Valero and Dr. Funda Meric-Bernstam at the University of Texas MD Anderson Cancer Center. The primary endpoint of this study is to assess efficacy by pathologic complete response.
ZW49 Program Update
The ZW49 program continues to advance in the weekly and once every three week dosing schedules. Expansion cohorts evaluating 2.5 mg/kg every three weeks have enrolled 29 patients and are expected to complete enrollment (30 patients) prior to year end. In parallel, the weekly dose regimen has enrolled 14 patients and continues to dose escalate as the maximum tolerable dose has not been reached. No dose-limiting toxicities have been observed to date. The results of these studies will inform the recommended Phase 2 dose and schedule with safety and efficacy data expected to be presented at a medical conference in 2022.
Financial Results for the Quarter Ended September 30, 2021
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, 2021 was $4.4 million compared to $2.6 million for the same period of 2020. Revenue for the third quarter of 2021 included a development milestone and research and development support under cost sharing arrangements. Revenue for the same period in 2020 included research and development support under cost sharing arrangements.
For the three months ended September 30, 2021, research and development expenses were $49.9 million compared to $54.4 million for the same period of 2020. The decrease was primarily due to lower third-party manufacturing expenses for zanidatamab which were partially offset by higher salary and benefit expenses from additional headcount as well as higher preclinical and other research and development program expenses. For the three months ended September 30, 2021, research and development expenses included non-cash stock-based compensation expense of $5.6 million from equity-classified equity awards and a $1.0 million recovery from the non-cash mark-to-market revaluation of certain historical liability-classified equity awards. Excluding stock-based compensation, research and development expenses decreased by $3.3 million for the three months ended September 30, 2021 compared to the same period in 2020.
For the three months ended September 30, 2021, general and administrative expenses were $15.5 million compared to $21.9 million for the same period in 2020. For the three months ended September 30, 2021, general and administrative expenses included non-cash stock-based compensation expense of $4.8 million from equity-classified equity awards and a $3.6 million recovery from the non-cash mark-to-market revaluation of certain historical liability-classified equity awards. Excluding stock-based compensation, general and administrative expenses increased by $4.9 million for the three months ended September 30, 2021 compared to the same period in 2020 primarily due to higher salary and benefit expenses from additional headcount, and professional fees.
Net loss for the three months ended September 30, 2021 was $60.6 million compared to $72.6 million for the same period of 2020. This was primarily due to the decrease in research and development and general and administrative expenses and the increase in revenue referred to above, which was partially offset by a decrease in interest income.
Zymeworks expects research and development expenditures to increase over time in line with the advancement and expansion of the Company’s clinical development of its product candidates, as well as its ongoing preclinical research activities. Additionally, Zymeworks anticipates continuing to receive 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, 2021, Zymeworks had $307.8 million in cash resources consisting of cash, cash equivalents and short-term investments. Based on our current operating plan, we believe that our current cash resources, combined with the collaboration payments we anticipate receiving, will enable us to fund our planned operations into late 2022 and potentially beyond.