All right, so good afternoon, everyone, and welcome to our next fireside chat. My name is Paul Jeng. I'm a member of the biotech research team at Guggenheim, and I'm very pleased to have Zymeworks as our next presenting company. With us today is Ken Galbraith, CEO. Ken, thanks for joining us.
Oh, great to be here. Thanks.
All right, so just to get things started, you know, maybe you could provide a brief overview of where Zymeworks is as a company, you know, including your clinical stage and collaboration assets, and how that sort of flows into your 5 by 5 portfolio strategy?
Sure, I'd love to. Yeah. So, Zymeworks is working on a combination of both antibody drug conjugates and multispecific antibody therapeutics. There's really three different elements to our business. One is our lead program, zanidatamab, which is fully partnered with both Jazz Pharmaceuticals and BeiGene, and right now is at the regulatory review stage, with a large phase III clinical study reading out this year, the HERIZON-GEA-01 study, looking at zanidatamab plus chemo in that HER2 population. Beyond zanidatamab, which we have partnered with BeiGene and Jazz, we have five new medicines which we're taking to the clinic under our 5 by 5 strategy. So we have five new INDs to file in the next 24 months, three ADCs and two multispecific antibodies.
So we're really excited about those medicines that we've created preclinically and looking forward to putting those in clinical studies to evaluate the uniqueness and differentiated mechanisms we have in those agents and understand what the clinical benefit might be. And then beyond that, we have a longer-term strategy of a pipeline of creating 2 new INDs per year out of a pretty productive R&D organization that are gonna be the next generation innovation of ADCs, including things like bispecific ADCs, which we've been working on for a while and we'll talk about this year. Dual payloads. On our T-cell engager side, we'll focus additional resources and time on different trispecific platforms and arrangements, and we also have some work we've done outside of oncology in autoimmune and inflammation, and also some work we've done around our dual cytokine engineering.
I think beyond that, we have a pretty rich pipeline for a longer-term strategy. Really excited to put the first 2 of our 5 by 5 into clinical studies this year, and really looking forward to working, continuing to work with Jazz and BeiGene on what we think is a really exciting opportunity in the HER2 space with zanidatamab.
Great, thanks for that. So, before we get into the in-house pipeline, maybe just a minute or two on zanidatamab. So, you know, can you talk about sort of the timing on the BLA submission for biliary tract cancer, where does that set you up for a potential approval? And maybe perhaps remind us of the economics of that partnership and, and maybe, you know, when you'd be expecting any milestone payments, based on zanidatamab.
Yeah, absolutely. So, back at the end of 2022, we completed a partnership with Jazz for the world rights to zanidatamab that were not held by BeiGene, who holds rights in Asia-Pacific outside of Japan. We had an upfront payment of $375 million at the outset of that agreement. Jazz took over all responsibility for continued development and commercialization of zanidatamab, which allowed us then to spend our capital on that 5 by 5 portfolio. We're still entitled to $525 million of approval milestones based on approval of zanidatamab in different markets around the world, commercial milestones of up to $900 million based on the performance of zanidatamab, and a royalty that goes up to 20% of Jazz's sales.
For BeiGene, we have something similar where we have some additional milestones based on filings and approvals they'll make, and a royalty that goes up to almost 20%, as well. So I think we're really proud that we developed zanidatamab. It's a really interesting biparatopic antibody that has a very unique mechanism, shows our protein engineering skills. We're really happy with the way that we partnered, with Jazz during the course of development, and obviously, we can see the benefits of that that might be brought to our 5 by 5 portfolio as we pursue other partnerships beyond Jazz.
And really looking forward to the financial benefit that could be provided to the company from the commercial success of zanidatamab with Jazz in BeiGene, in terms of those additional milestones and royalties, and how we think about how that's gonna fund the continued growth of our business. Right now, we've been keeping everything well-financed. We started the year with $455 million in cash. We've got a cash runway into late 2027, so I think we're doing a good job of practicing really good R&D and making sure we keep the capital framework to be able to support that and make sure that we can, as we did with the Jazz partnership, enter into additional partnerships and collaborations that allow us to accelerate and broaden and grow the business even further.
Great. So, then maybe on the pipeline, you know, you have a history as an ADC company, you know, with Zani-Zo, and you have a platform that you've sort of, you know, partnered in the past. But, you know, with the new assets that are coming down the pipe, you know, can you talk about your overall approach there, around sort of molecule design, payload with this topo I payload and other considerations that broadly go into your platform?
Yeah. So Zymeworks started its history as a bispecific engineering company with a computational platform. We didn't call it AI in those days, but I guess it really did qualify as AI, and we did, you know, we did engineering of bispecific antibodies for others, including Janssen and others who are still working on some of those agents. A number of years ago, we decided that incorporating antibody-drug conjugates into the company would be interesting, so we made an acquisition and brought in the capabilities for bioconjugation and payload into the company to work with our protein engineering group on the basis that we could build good ADCs by focusing on all elements. And we also liked the idea of doing things like bispecific ADCs in the future and combining those two.
So we, we became an ADC company a little bit after being a bispecific company. I think on the ADC side, we came in with a very specific mandate of looking at auristatin payloads, because that was the payload of the day. So the first two that we created, the HER2 ADC Zani-Zo, which we still have rights to, and the XB002 that Exelixis has under development, were both our auristatin payloads. I think as we saw the development of DXd coming from Daiichi Sankyo, we, we also found that, topo class might make a really, great payload for ADCs. And so we started a medicinal screening effort to design our own proprietary payload, the same way that Daiichi and others have done, to incorporate in future ADCs.
So what you see in our 5 by 5 portfolio right now is 3 ADCs going to the clinic this year and next year, 1 against folate receptor alpha, 1 against NaPi2b, and 1 against GPC3. All of those have the same proprietary payload that we developed, and have the same linker strategy, and obviously have what we hope are really unique antibodies, attached, which our protein engineers have helped develop, you know, properties that we think make an antibody extremely ideal, in an ADC context. So very strong internalization, very strong tumor penetration, as we see in our 3D spheroid models. So I think there's elements in the protein engineering and the antibody side that we think can make a better ADC.
We're really excited about those three novel ADCs we've been working on for some time period and putting them in the clinic and hoping that the differentiated way that we've put those together will make a difference on those targets against what we've seen from other ADCs or other product modalities that have applied against those same targets.
Got it. Then maybe drilling down on your overall sort of engineering philosophy, you know, how do you think about sort of, you know, linker strength? How do you think about DAR? And then, you know, why, why, why topo, you know, one as the sort of payload of choice?
Yeah, I think we, you know, I think we started life as an ADC company really with a very similar philosophy that others had, which was, you know, strength and stability of linker is extremely important, and strength and potency of payload was extremely important to try and improve efficacy. I think after we saw a number of the DXd molecules be developed and others, there was some thought that maybe that wasn't the way to make ADCs the most effective and most useful. And we published on this last year based on the data work that we did, which was pretty interesting.
So I think we found the belief that as protein engineers, you know, antibody dose is important, so finding a way to get as much dose of an ADC on board in a patient and find strong internalizing antibodies, which also penetrate tumors extremely well, could allow you to use a more modest payload attached to an ADC, which would also allow you to maybe have a linker which was a little less stable and allowed for a greater bystander killing effect, which, as we've seen, can be an extremely important contributor to efficacy in an ADC approach.
So I think the three that we developed now are quite different from maybe where we started from, but based around the data that we've looked at, at all the ADCs that we've looked at that have been in clinical studies, all of the, you know, chemo payloads that have been on those used as just naked chemotherapeutic agents. I think we have a very good sense of how the antibody linker and payload strategy can work together to hopefully optimize efficacy and reduce some of the tolerability we've seen with prior ADCs. We think really clearly early on about using ADCs as combination agents, not as monotherapy agents, and using them in combination with standard of care at the earliest point possible in a patient's prognosis. So that's gone into all the design of all three of these.
So I think you'll see in clinical development, we'll move very quickly through monotherapy to looking at combinations of our ADCs with the standard of care and trying to understand the impact we could have on an earlier line patient opportunity. And that's gone into the very specific design of the antibody selection, the linker selection, and the payload selection. That's where we really see the most useful utilization of ADCs, is probably in combination with standard of care at an earlier patient prognosis, to try and really see if you can drive response rates and overall survival to what are hopefully better levels than we currently see.
Okay. Then maybe going through some of the specific programs. So ZW191 going for the folate receptor alpha space, which obviously has some clinical and commercial validation. How are you sort of approaching this program? How do you think that differentiation can sort of, you know, apply given the existing competition?
Yeah, I think, it's great to have validation with Mirv. I think our approach was, you know, since we can't be first, let's try and be best and broadest in this category. So, you know, we think topo payloads will deliver a higher response than non-topo payloads in many of these patient populations, so it made sense to use our proprietary payload. But we thought really hard about how we designed and developed this antibody to really try and get a benefit for patients, regardless of tumor type, regardless of expression level. So one of the ways we can try and be best is to be the broadest applicable.
So we're not really trying to just compete directly with Mirv and Mirv's current population or maybe even where AbbVie suggested they'll expand it to, but we'd like to find a way that a folate receptor is an important biomarker of interest in a patient, regardless of expression level of that biomarker, that we can find a way to deliver a payload in an ADC format that would provide some benefit. So we're looking at breadth of utilization, not just within ovarian cancer, but outside of gynecological cancer. And we're looking at hopefully finding a way to have a benefit regardless of expression level.
So when you think about how you design the antibody and select it, you know, that's from what we've seen so far of all the agents in the clinic, that's the strongest internalizing antibody you see against folate receptor and also penetrates tumors in a much higher degree, and we think that those might be extremely important for efficacy. It also has a very strong bystander killing effect with a modestly potent payload, which we think also will be important for doing that.
So our approach is really to try and look at being able to find a successful treatment for patients, regardless of tumor type and regardless of expression levels, and just make folate receptor biomarker the most important thing to understand about a patient before thinking about maybe having an ADC that could be effective, you know, we got to prove that in clinical studies, and that's the purpose of our clinical development program.
Got it. And what's the timelines for IND for this one?
Yeah, so this IND will be this year. We haven't given more guidance to that. I think once you see it up on clinical trials, you'll know that we're initiated. And I think we'll talk more about the details once you see it up on clin trials. We're just really excited to get it started. I think we have a really great clinical development program. I think we're well-positioned to execute on a plan, which probably relies a lot more on patient recruitment outside the U.S. So it's a pretty global plan from the very start in even dose escalation.
So I think you'll see many countries involved from the very start, many sites, which hopefully will allow us to access a broad group of patients extremely quickly to study all the cohorts that we like to study in phase I. As soon as we can establish some monotherapy efficacy, we really look forward to studying in combination with those standard of care agents, which we think is a really important piece of our clinical development and commercial strategy.
Okay. Then maybe for the next program, ZW220, you know, NaPi2b ADC. Obviously, there's been some, you know, recent stumbles with this in the clinic, but obviously a very compelling target. You know, what are your thoughts around this molecule, the opportunity, and how you're positioned?
Yeah, we think NaPi2b is a really, you know, well-understood target biologically. It's a target of interest, not just from ourselves, but other potential partners. It is in our concentration of interest in gynecological cancer and lung cancer, so it may be a way to deliver a payload against the same patient population, other than folate receptor alpha. So I think the biology is really well understood from the prior Genentech program. I think there's lots to learn from the programs at Mersana, which were commenced. And so I think from all the preclinical work we've done so far, we're really excited about the antibody we built, the payload, which is similar to folate receptor, and our clinical development approach, for both inside gynecological cancer and in lung cancer with this target.
So, it's really exciting. You know, everybody's wondering about the levels of co-expression between these two different biomarkers, which are relevant expression levels of being high, medium, and low in this population versus folate, which has obviously been better understood. But I think a lot of our clinical development that we're looking to undertake will hopefully answer some of those questions about the target, as well as our particular ADC against that target.
Okay. You mentioned the initial focus will be on ovarian cancer or gynecological, or have you not sort of believed yet?
I haven't really said as much there as we have about folate receptor. It's obviously a 2025 IND target, so I think as we get closer, we'll talk a little bit more about that. It's obviously a target of interest for those two specific areas, and we're excited about our approach for NaPi2b, similarly as we are with folate receptor.
Okay. Then maybe in a slightly different modality, for ZW171, there's been, you know, several attempts in the past to address mesothelin, with modalities, including cell therapies. You know, what gives you the confidence in your T-cell engager approach? How is the engineering, you know, what sort of went to that engineering process, and what are the opportunities that are the most attractive to you for this program?
Yeah, mesothelin is well understood biologically. It is a target of interest that was identified similar to Trop-2 and MUC16 and others at the time. It just hasn't had success in clinical studies. I think many of the ADC approaches were just too toxic for the target. Because we're not just an ADC company, we can take another approach, which is a T-cell engager approach. I think in this case, we felt that, you know, adding another element into this and making it not just a bispecific, but a trispecific, was important. So in this case, we designed a really interesting T-cell engager, which is a 2+1 format, and we think that additional binding on mesothelin is really important for activity.
We also have a new CD3 antibody, which we're testing for the first time on this T-cell engager, and we'll use throughout our T-cell engagers if it works, and it's a really low avidity approach and we think that will hopefully limit some of the toxicity issues that have been seen with T-cell engagers, especially CRS. You know, we took a lot of comfort out of the step-up data that was published at ESMO by another compound, which is also a two plus one format with a low avidity CD3. You can see the benefit of additional binding on efficacy, and you can see the ability to dose higher levels, just because of having a different CD3 approach. So, I think you'll start to see more of those t hat two plus one format is a pretty interesting way to think about making T-cell engagers more effective.
So we're really excited to put that one in the clinical studies this year, and recruit, and I think we're, you know, again, it's a very global study, so you see a lot of that patient recruitment done outside the U.S. and get access to patients. Mesothelin is a pretty broad target of interest. You'll see us focus on just a few cohorts, which are the ones that are the most interest for us from a registration or commercial perspective, and move as quickly as we can to prove our thesis around this, you know, the two plus one format and our new CD3 antibody, which is novel.
Great. Then maybe speaking about some of these novel formats, you've also talked about, you know, next-generation approaches that are still pretty early in the development process, but those include, you know, trispecific antibodies, as well as potentially, you know, dual payload ADCs. Maybe on both these different modalities, how do you think about balancing safety and efficacy, especially with the dual payloads? Is there a strategy behind how you select targets with these modalities, and, you know, when can we expect additional updates here?
Yeah, I think, you know, I think for the future of both ADCs and trispecifics for us, you know, the emphasis we had on the 5 by 5 won't change, which is we wanna get to the earliest patient prognosis stage as possible and work in combination with other agents in standard of care. We think that's really the best way to try and get efficacy. So by moving ADCs to a bispecific ADC approach, we think that's actually could be beneficial. We think moving to a dual payload structure, where, you know, the next best payload beyond topo might be 2 payloads, and the synergies of those 2 payloads being released together might be more effective. We'll still focus on reducing tolerability, so you can combine those with other agents, whether checkpoint inhibitors or VEGF or other agents.
So I don't think that has really changed. I think on the trispecifics, we're really excited about the incorporation of the CD28 costimulatory factor in with CD3, which is in our trispecific, and we think the way to control that balance is to have it in the same structure. So that'll be the fifth of the 5 by 5 that we nominate. We haven't set the target yet, but we will this year, so we're excited about that. But even for those T-cell engagers, we would look to to use those in combination with PD-1 or probably next-generation checkpoint inhibitors as well, when you think about PD-1 LAG-3 or PD-1 VEGF or other agents.
I think there's another wave of immuno-oncology coming, which will look at multiple mechanism checkpoint inhibitors, and we know that T-cell engagers work better with PD-1 blockade a lot of the time, and so we're excited to explore that. So we like multifunctional therapeutics. We like designing as many mechanisms into a single structure as you can. We think that has some benefits for developing and what you might see from efficacy. And we're hoping that our multifunctional therapeutic approach with both ADCs and T-cell engagers will give us the ability to make a difference for a number of those.
Great. And so then, can you remind us quickly of the timing of the sort of INDs that you have disclosed for the next two years?
Yeah. So we said we have 5 INDs to file in the next 24 months, so our clinical and regulatory groups are busy and all the preclinical translation groups are pretty busy. I think we've really developed a good system to do this in a timely, quality way. So I think we can meet those timelines. We've named 4 of the 5 already, and we'll name the 5th one this year. I think with that in place, we're already starting to think about what's next. So you'll see a number of publications this year starting at AACR on what's beyond the 5 by 5.
And we'll hold another R&D day in the Q4 of this year, as we did in 2022, to really talk about our progress on the 5 by 5 and also talk about a little bit more detailed strategy and targets around the longer-term strategy, what to expect beyond this 5 by 5 . So I would, you know, I'd look forward to that. I think there's a whole other longer-term strategy in the company to create innovative agents beyond Zani, which I think is a fantastic medicine, and what we put into the 5 by 5 portfolio, and we're kind of excited to start thinking about developing that, once our focus on the 5 by 5 is well in hand.
Great. So maybe with our last minute, just wanted to ask about your other clinical assets, Zani-Zo, where t here's going to be a phase 2 trial, I think, planned for this year in non-small cell lung cancer. You know, what do you see as the opportunity for, you know, HER2 targeted agent in this indication, and what can we expect in terms of updates?
Yeah, I think, again, Zani-Zo is a, you know, an older generation ADC for us, that we would describe it. I mean, it's a very strong linker, it's a low DAR, it's an auristatin payload, but it's got that biparatopic Zani antibody on it, which we think is interesting. I think in the HER2 space, one of the few areas that still, you know, is ripe for innovation is in the non-small cell lung cancer, HER2 overexpressing space. It's just an area that other approved agents have not been able to be successful in, and even agents under development like DXd have not been successful. So we think there's still an opportunity there for a first-in-class agent in the HER2-targeted space.
So that justifies, you know, a limited clinical investment in a phase 2 study, which we're running this year, at looking at Zani-Zo in combination with Pembro, which could be a really interesting synergy in the auristatin payload with the mechanism and Pembro, as we saw with other agents in EV-302 study that was at ESMO last year. So that's really interesting. We'll do it in high expressers first, but there's a pretty big low-expressing population in the HER2 space in non-small cell lung cancer, and so that might be a bigger opportunity than people realize. We just need some clinical data to show that we can work effectively with Pembro and really get to a response rate and a duration of response that's not been possible by other HER2-targeted agents so far, and hopefully, we can be the first one.
Great. Well, lots of exciting updates on the horizon. I think we're up on our time, so I just wanted to thank you again, Ken, for joining us, and thanks to the audience for listening in.
Yeah. Appreciate the time. Thank you.